A leftward shift in the short-run aggregate supply curve causes
A) price levels to fall.
B) real output to rise.
C) demand-pull inflation.
D) simultaneous inflation and a decrease in total real output.
E) unemployment to fall.

Question

Quizplus · Accepted Answer

A leftward shift in the short-run aggregate supply curve typically results in higher prices and lower output, which is known as stagflation. This scenario leads to simultaneous inflation and a decrease in total real output.

A Leftward Shift in the Short-Run Aggregate Supply Curve Causes