Which of the following shifts the aggregate supply curve leftward?
A)a decrease in potential GDP
B)a fall in the money wage rate
C)a decrease in the price level
D)a fall in the real wage rate
E)an increase in potential GDP

Question

Quizplus · Accepted Answer

A decrease in potential GDP implies that the economy is producing less than it is capable of producing, leading to a decrease in the overall supply of goods and services in the economy. This causes the aggregate supply curve to shift leftward.

Which of the Following Shifts the Aggregate Supply Curve Leftward