An increase in input prices will
A)aggregate demand to the right.
B)aggregate demand to the left.
C)aggregate supply to the right.
D)aggregate supply to the left.

Question

Quizplus · Accepted Answer

An increase in input prices will cause a decrease in the profitability of production, making firms less willing to produce goods and services. This decrease in production leads to a decrease in aggregate supply, or a shift to the left.

An Increase in Input Prices Will