Which of the following shifts the short-run aggregate supply curve to the right?
A)an increase in the money supply
B)an increase in the price level
C)a decrease in the expected price level
D)All of the above are correct.

Question

Quizplus · Accepted Answer

A decrease in the expected price level will encourage firms to increase their production because they expect to receive a higher relative profit. This shift will result in an increase in output and a decrease in the price level, causing a movement along the aggregate demand curve.

Which of the Following Shifts the Short-Run Aggregate Supply Curve