Other things being equal,under what circumstances will the short-run aggregate supply curve shift to the left?
A)if energy prices fall
B)if there is a short-term increase in input prices
C)if technology and productivity increase in the nation
D)if the capital stock of the nation increases

Question

Quizplus · Accepted Answer

A short-term increase in input prices, such as the cost of labor or raw materials, will increase production costs and decrease short-run aggregate supply, causing the curve to shift to the left. A decrease in energy prices (A) could actually shift the curve to the right, as it would lower production costs for many businesses. An increase in technology and productivity (C) or an increase in capital stock (D) would shift the curve to the right, as they both lead to increased efficiency and lower costs for businesses.

Other Things Being Equal,under What Circumstances Will the Short-Run Aggregate