Other things constant, an increase in resource prices will:
A) increase aggregate demand.
B) decrease aggregate demand.
C) decrease aggregate supply.
D) increase aggregate supply.

Question

Quizplus · Accepted Answer

An increase in resource prices makes production more expensive, which typically reduces the quantity of goods and services that producers are willing to supply at any given price level, thus decreasing aggregate supply.

Other Things Constant, an Increase in Resource Prices Will