-Refer to Exhibit 8-4.A shift in short-run aggregate supply from SRAS₂ to SRAS₁ could have been the result of A) a decrease in the price level. B) an increase in the price level. C) an increase in wage rates. D) a decrease in wage rates.

Question

Quizplus · Accepted Answer

An increase in wage rates would increase production costs for businesses, leading to a decrease in short-run aggregate supply (shift to the left).