If the Fed accommodates a leftward shift in the aggregate supply curve
A) real output will fall.
B) the price level will rise considerably.
C) the aggregate demand curve will shift downward to the left.
D) the Phillips curve will shift downward to the left.
E) inflationary pressures will rapidly die out.

Question

Quizplus · Accepted Answer

When the Fed accommodates a leftward shift in the aggregate supply curve, it typically means they are increasing the money supply to prevent a decrease in output, which can lead to a significant rise in the price level (inflation).

If the Fed Accommodates a Leftward Shift in the Aggregate