Which of the following would shift the short-run aggregate supply curve of an industry rightward but not change its short-run aggregate supply curve?
A)An increase in money supply
B)A positive supply shock
C)A decrease in the price level
D)An increase in the price level
E)An increase in the interest rate

Question

Quizplus · Accepted Answer

A positive supply shock (such as a technological advancement or decrease in input costs) would shift the short-run aggregate supply curve (SRAS) of an industry rightward, meaning that at any given price level, firms in the industry can supply more output. However, it would not change the industry's SRAS curve, which depicts the relationship between overall price level and output in the short run. The other options listed would either not affect the SRAS curve at all (such as an increase in money supply or an increase in interest rate) or would shift it leftward (such as a decrease in the price level or an increase in the price level).

Which of the Following Would Shift the Short-Run Aggregate Supply