What would result if the AS curve shifts to the left?
A)Equilibrium GDP will fall and prices will rise.
B)Equilibrium GDP will fall and prices will also fall.
C)Equilibrium GDP will rise and prices will fall.
D)Equilibrium GDP will rise and prices will also rise.

Question

Quizplus · Accepted Answer

If the AS curve shifts to the left, it means that the cost of production has increased. As a result, firms will reduce their level of production, which will lead to a decrease in equilibrium GDP. At the same time, the increased cost of production will lead to higher prices, which is why prices will also rise.

What Would Result If the AS Curve Shifts to the Left