Which of the following shifts the short-run aggregate supply to the left?
A)an increase in the price level
B)an increase in the expected price level
C)an increase in the capital stock
D)an increase in interest rates

Question

Quizplus · Accepted Answer

An increase in the expected price level would cause suppliers to increase the quantity of goods supplied at any given price level, shifting the short-run aggregate supply curve to the right. Therefore, any answer choice that does not involve an increase in expected price level would shift the short-run aggregate supply to the left. Therefore, the correct answer is B.

Which of the Following Shifts the Short-Run Aggregate Supply to the Left