Short-run aggregate supply increases if
A) the price level falls.
B) prices for resource inputs fall.
C) prices for resource inputs rise.
D) the price level rises.
E) government transfer payments decrease.

Question

Quizplus · Accepted Answer

If prices for resource inputs fall, firms can produce more output at every price level, reducing their costs of production and increasing short-run aggregate supply.

Short-Run Aggregate Supply Increases If