The AS curve shifts leftward if
A)good weather increases agricultural harvests.
B)OPEC reduces world oil prices.
C)tax cuts stimulate labor supply.
D)the money wage rate increases.
E)government expenditure increases.

Question

Quizplus · Accepted Answer

An increase in the money wage rate will cause an increase in the cost of production for firms, which will decrease their profit margins and cause them to produce less output at any given price level. This will shift the AS curve leftward. The other choices do not directly impact the cost of production or the level of output, and will not shift the AS curve leftward.

The AS Curve Shifts Leftward If