In reference to the aggregate supply curve, what would a decrease in the price level cause?
A) an increase in the quantity of aggregate output supplied
B) a decrease in the quantity of aggregate output supplied
C) a leftward shift of the aggregate supply curve
D) a rightward shift of the aggregate supply curve

Question

In reference to the aggregate supply curve, what would a decrease in the price level cause?  
A) an increase in the quantity of aggregate output supplied 
B) a decrease in the quantity of aggregate output supplied 
C) a leftward shift of the aggregate supply curve 
D) a rightward shift of the aggregate supply curve

Quizplus · Accepted Answer

According to the law of supply, producers are willing to supply more goods and services at higher prices. Therefore, a decrease in price level will lead to a decrease in the quantity of aggregate output supplied. This movement along the aggregate supply curve is called a contraction.

In Reference to the Aggregate Supply Curve, What Would a Decrease