Other things being equal,the economy's AS curve will shift upward in the short run if there is
A)an increase in the cost of capital.
B)a decrease in the cost of capital.
C)a decrease in nominal wages.
D)a decrease in the price level.
E)an improvement in technology.

Question

Quizplus · Accepted Answer

An increase in the cost of capital raises production costs for firms, leading to a decrease in aggregate supply, causing the AS curve to shift upward in the short run.

Other Things Being Equal,the Economy's AS Curve Will Shift Upward