Which of the following statements best illustrates a correct shift of the short run aggregate supply curve?
A)The short-run aggregate supply curve is shifted rightward by an increase in the price of any input, and it is shifted leftward by a decrease.
B)The short-run aggregate supply curve is shifted rightward by a technological breakthrough that increases the productivity of the labour force.
C)The short-run aggregate supply curve is shifted leftward by a decrease in the price of any input, and it is shifted rightward by an increase.
D)The short-run aggregate supply curve is shifted leftward by an increase of skilled workers in the labour force.

Question

Quizplus · Accepted Answer

The correct shift of the short run aggregate supply curve is caused by changes in factors that affect production costs and the willingness of firms to produce output. A technological breakthrough increases productivity and lowers production costs, resulting in a rightward shift of the short-run aggregate supply curve. A) is incorrect because a decrease in input prices would lower production costs and shift the short-run aggregate supply curve rightward, not leftward. C) is incorrect for the same reason. D) is incorrect because an increase in skilled workers would increase productivity and lower production costs, resulting in a rightward shift of the short-run aggregate supply curve.

Which of the Following Statements Best Illustrates a Correct Shift