Figure 33-2. -Refer to Figure 33-2.The shift of the short-run aggregate-supply curve from AS₁ to AS₂ A) could be caused by an outbreak of war in the Middle East. B) could be caused by a decrease in the expected price level. C) causes the economy to experience an increase in the unemployment rate. D) causes the economy to experience stagflation.

Question

Quizplus · Accepted Answer

A shift of the short-run aggregate supply curve from AS₁ to AS₂ would represent an increase in aggregate supply. This could be caused by a decrease in the expected price level, such as a decrease in input costs or an increase in productivity. This would shift the curve to the right and result in a lower price level and higher output. It would not necessarily cause an increase in unemployment or stagflation. A shift to the left, on the other hand, would represent a decrease in aggregate supply and could be caused by factors such as an increase in input costs or a decrease in productivity.

Figure 33-2. -Refer to Figure 33-2.The Shift of the Short-Run Aggregate-Supply Curve