An increase in the price of a key input in production, like oil, increases aggregate supply.

Name: An increase in the price of a key input in production, like oil, increases aggregate supply.
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An increase in the price of a key input in production, like oil, decreases aggregate supply. When input costs increase, firms are less willing to supply the same quantity of goods or services at any given price level, leading to a leftward shift in the aggregate supply curve.

An Increase in the Price of a Key Input in Production