A change in the expected price level is likely to cause which of the following?
A)a shift in the short-run aggregate supply curve and long-run aggregate supply curve
B)a shift in the short run aggregate supply curve
C)a shift in the aggregate demand curve
D)a shift in the long-run aggregate supply curve

Question

Quizplus · Accepted Answer

An expected change in the price level will shift the short-run aggregate supply curve due to supplier behavior. A change in expected price level does not affect aggregate demand or the long-run aggregate supply curve in the short-term. In the long-run, the long-run aggregate supply curve may shift due to changes in technology or resources, but not solely due to an expected change in the price level.

A Change in the Expected Price Level Is Likely to Cause