Which of the following could be expected to shift the short-run aggregate supply curve leftward?
A)wage increases with corresponding increases in labour productivity
B)a decrease in the price of oil
C)a natural disaster
D)an increase in interest rates affecting the cost of capital

Question

Quizplus · Accepted Answer

A natural disaster, such as a hurricane or earthquake, can disrupt production and cause a decrease in short-run aggregate supply. This is because the disaster can damage infrastructure, halt production, and cause shortages of resources and labor, all of which can increase costs and reduce output in the short run. The other options listed could either have a neutral or positive effect on short-run aggregate supply.

Which of the Following Could Be Expected to Shift the Short-Run