Which of the following will cause a decrease in aggregate supply but no change in long-run aggregate supply?
A)A decrease in labour productivity.
B)An increase in factor prices.
C)An increase in the capital stock.
D)A decrease in the labour participation rate.

Question

Quizplus · Accepted Answer

An increase in factor prices raises production costs, reducing short-run aggregate supply without affecting the long-run aggregate supply, which is determined by factors like technology and resources.

Which of the Following Will Cause a Decrease in Aggregate