-Refer to Exhibit 8-4.Which of the following could not have caused a shift in aggregate supply from SRAS₁ to SRAS₂? A) an increase in productivity B) a beneficial supply shock C) a decrease in the price of a nonlabor input D) a change in the price level E) a decrease in wage rates

Question

Quizplus · Accepted Answer

A shift in the aggregate supply curve (SRAS) is caused by factors that change the production costs or productivity, such as changes in productivity, input prices, or technology. A change in the price level, however, affects the aggregate demand, not the aggregate supply, and thus would not cause the SRAS curve to shift.