Suppose there is a increase in short-run aggregate supply with no change in long-run aggregate supply. This situation could be the result of
A) an increase in the price of oil.
B) a decrease in the money wage rate.
C) a technological advancement.
D) an increase in the quantity of capital.

Question

Quizplus · Accepted Answer

A decrease in the money wage rate would lower production costs, leading to an increase in short-run aggregate supply. An increase in the price of oil would increase production costs, leading to a decrease in short-run aggregate supply. A technological advancement or an increase in the quantity of capital would shift both short-run and long-run aggregate supply to the right. Since there is no change in long-run aggregate supply in the question, these options cannot be correct.

Suppose There Is a Increase in Short-Run Aggregate Supply with No