What could a leftward shift of the short-run aggregate supply curve reflect?
A)an increase in the capital stock
B)lower expected input prices
C)a change in technology that increases output per unit of input
D)higher expected input prices

Question

Quizplus · Accepted Answer

A leftward shift of the short-run aggregate supply curve reflects that the expected input prices are higher. This means that businesses are facing higher costs of production, which reduces their willingness to supply goods and services at any given price level. Higher input prices could include the costs of labor, raw materials, energy, or other inputs that are needed to produce goods and services. An increase in the capital stock (choice A), lower expected input prices (choice B), or a change in technology that increases output per unit of input (choice C) would shift the aggregate supply curve to the right, indicating that businesses can produce more at every price level.

What Could a Leftward Shift of the Short-Run Aggregate Supply