Which of the following will decrease the short-run aggregate supply?

Question

Quizplus · Accepted Answer

An increase in wages will increase the cost of production, leading to a decrease in short-run aggregate supply. Choice B, an increase in the labor force, would actually increase short-run aggregate supply as more workers would be available to produce goods and services. Choice C, a decrease in net exports, would not directly affect short-run aggregate supply but would affect aggregate demand. Choice D, a decrease in the personal income tax rates, would increase disposable income and aggregate demand, leading to an increase in short-run aggregate supply.

Which of the Following Will Decrease the Short-Run Aggregate Supply