Refer to the information provided in Figure 12.3 below to answer the questions that follow. Figure 12.3 -Refer to Figure 12.3.A decrease in aggregate supply is represented by A)a movement from Point B to Point A along AS₁. B)a movement from Point B to Point C along AS₁. C)a shift from AS₁ to AS₂. D)a shift from AS₁ to AS₀.

Question

Quizplus · Accepted Answer

A decrease in aggregate supply is represented by a shift from AS₁ to AS₂. This shift shows that at any given price level, firms are willing to supply less output than before. Option A represents a movement along the same aggregate supply curve and does not indicate any shift in supply. Option B represents an increase in aggregate supply, not a decrease. Option D also represents a movement along the same aggregate supply curve and does not indicate any shift in supply.

Refer to the Information Provided in Figure 12