Exhibit 14-3 Aggregate supply and demand curves

-The shift from AS₁ to AS₂ in Exhibit 14-3 could be caused by a(n):
A) sudden increase in the price of oil.
B) increase in input prices for most firms.
C) increase in workers' wages.
D) all of the above.

Question

Exhibit 14-3 Aggregate supply and demand curves
 
-The shift from AS₁ to AS₂ in Exhibit 14-3 could be caused by a(n):
A) sudden increase in the price of oil. 
B) increase in input prices for most firms. 
C) increase in workers' wages. 
D) all of the above.

Quizplus · Accepted Answer

Any of these factors can cause a shift in the aggregate supply curve. An increase in the price of oil, an increase in input prices for most firms, or an increase in workers' wages would all result in a decrease in short-run aggregate supply, shifting the curve to the left from AS₁ to AS₂.

Exhibit 14-3 Aggregate Supply and Demand Curves