Which of the following will cause a positive aggregate supply shock?
A)an increase in the price of raw materials
B)a decrease in the price of foreign output
C)an increase in the price of foreign output
D)a decrease in the price of oil
E)a decrease in productivity

Question

Quizplus · Accepted Answer

A decrease in the price of oil will lower the cost of production for firms, leading to a positive aggregate supply shock. The other options would lead to an increase in production costs and therefore would have a negative impact on aggregate supply.

Which of the Following Will Cause a Positive Aggregate Supply