Which of the following changes aggregate supply and shifts the AS curve?
I.a change in the price of a major resource
Ii.increases in the amount of capital
Iii.a change in the money income of consumers
A)i only
B)ii only
C)iii only
D)i and ii
E)i,ii,and iii

Question

Quizplus · Accepted Answer

I. A change in the price of a major resource will affect the cost of production, causing the AS curve to shift. If the price of a major resource increases, firms will have to pay more to produce their goods, resulting in a decrease in aggregate supply and a shift to the left of the AS curve.

II. Increases in the amount of capital will increase productivity, efficiency, and innovation, leading to an increase in aggregate supply and a shift to the right of the AS curve.

III. A change in the money income of consumers may affect demand but will not directly affect aggregate supply or shift the AS curve.

Which of the Following Changes Aggregate Supply and Shifts the AS Curve