Which media headline describes a shift of the SAS curve only?
A) "Decreased consumer spending may lead to recession."
B) "Increased consumer spending is expected to lead to inflation, with no change in real GDP."
C) "Higher wage settlements may lead to inflation."
D) "Faster growth may be due to more women entering the labour force."
E) "Recent tornadoes destroyed factories in Edmonton and Calgary."

Question

Quizplus · Accepted Answer

Higher wage settlements directly affect the cost of production, which can shift the Short-Run Aggregate Supply (SAS) curve. This is because higher wages increase production costs for businesses, leading to a decrease in the quantity of goods and services supplied at any given price level, thus shifting the SAS curve.

Which Media Headline Describes a Shift of the SAS Curve