Which media headline describes a leftward shift of the LAS curve?
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

A leftward shift of the Long-Run Aggregate Supply (LAS) curve occurs when there is a decrease in the economy's potential output, such as when natural disasters destroy productive capacity, as described in option E.

Which Media Headline Describes a Leftward Shift of the LAS