If the prices of inputs rise,what happens to short-run aggregate supply?
A)It shifts right.
B)It doesn't shift, but the economy moves down along the SRAS curve.
C)It doesn't shift, but the economy moves up along the SRAS curve.
D)It shifts left.

Question

Quizplus · Accepted Answer

If the prices of inputs rise, the cost of production increases, resulting in a decrease in short-run aggregate supply. This is because firms are less willing to produce output at a higher cost, leading to a leftward shift of the SRAS curve.

If the Prices of Inputs Rise,what Happens to Short-Run Aggregate