An increase in the expected future price of inputs will cause:
A) the short-run aggregate supply curve to shift to the left.
B) the aggregate demand curve to shift to the right.
C) a movement rightward along the short-run aggregate supply curve.
D) the long-run aggregate supply curve to shift to the left.

Question

Quizplus · Accepted Answer

An increase in expected future price of inputs will increase the cost of production, leading to a decrease in short-run aggregate supply. Thus, the short-run aggregate supply curve will shift to the left.

An Increase in the Expected Future Price of Inputs Will