Figure 17-8. The left-hand graph shows a short-run aggregate-supply (SRAS) curve and two aggregate-demand (AD) curves. On the right-hand diagram, "Inf Rate" means "Inflation Rate."

-Refer to Figure 17-8. The shift of the aggregate-supply curve from AS₁ to AS₂ could be a consequence of

Question

Figure 17-8. The left-hand graph shows a short-run aggregate-supply (SRAS) curve and two aggregate-demand (AD) curves. On the right-hand diagram, "Inf Rate" means "Inflation Rate."

-Refer to Figure 17-8. The shift of the aggregate-supply curve from AS₁ to AS₂ could be a consequence of

Quizplus · Accepted Answer

A shift to the left of the short-run aggregate supply (SRAS) curve indicates a decrease in the amount of output that firms are willing to supply at any given price level. This could happen due to an adverse supply shock, such as an increase in the price of key inputs like oil or a decrease in productivity. Answer choices A and D are not likely to cause a shift in the SRAS curve, and Choice C refers to a movement along the SRAS curve, not a shift.