Which of the following changes shifts the SRAS curve up?
A)An increase in the labor force
B)An increase in firms' costs
C)A decrease in government purchases
D)An increase in the money supply

Question

Quizplus · Accepted Answer

An increase in firms' costs, such as higher wages or materials costs, will cause a decrease in short-run aggregate supply (SRAS) because it becomes more expensive for firms to produce goods and services. This shift would cause higher prices and lower output in the short run. The other choices would not directly affect the SRAS curve.

Which of the Following Changes Shifts the SRAS Curve Up