A decrease in productivity will shift
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

A decrease in productivity means that the economy is producing fewer goods and services with the same amount of resources. This shift will result in a decrease in aggregate supply, which means that the production capacity of the economy has decreased. This will cause a shift of the aggregate supply curve to the left. Therefore, the correct answer is option D.

A Decrease in Productivity Will Shift