Which of the following shifts the short-run aggregate and the long-run aggregate supply left?
A) a decrease in the price level
B) a decrease in the expected price level
C) a decrease in the availability of natural resources
D) a decrease in the money supply

Question

Quizplus · Accepted Answer

A decrease in the availability of natural resources would create an increase in the cost of production, shifting the short-run aggregate supply curve to the left. In the long run, firms may invest in research and development to find ways to utilize alternative resources, but in the short run, the aggregate supply curve shifts to the left.

Which of the Following Shifts the Short-Run Aggregate and the Long-Run