Which of the following increases aggregate supply in the short-run,everything else held constant?
A)an increase in the price of crude oil
B)a successful wage push by workers
C)expectations of a higher inflation
D)a technological improvement that increases worker productivity

Question

Quizplus · Accepted Answer

A technological improvement increases worker productivity, which allows firms to produce more output with the same amount of inputs, thus increasing aggregate supply in the short-run. None of the other choices listed would increase aggregate supply in the short-run. A wage push by workers would increase costs for firms, leading to a decrease in aggregate supply. Expectations of higher inflation would lead to an increase in input costs, also decreasing aggregate supply. An increase in the price of crude oil would increase production costs for firms, also leading to a decrease in aggregate supply.

Which of the Following Increases Aggregate Supply in the Short-Run,everything