Refer to the information provided in Figure 26.3 below to answer the question(s) that follow. Figure 26.3 -Refer to Figure 26.3. A decrease in aggregate supply is represented by A) a movement from Point B to Point A along AS₁. B) a movement from Point B to Point C along AS₁. C) a shift from AS₁ to AS₂. D) a shift from AS₁ to AS₀.

Question

Quizplus · Accepted Answer

A decrease in aggregate supply would shift the AS curve to the left, from AS₁ to AS₂, as shown in the diagram. Movements along the curve, such as from Point B to Point A or Point C, would only indicate changes in price level and not a shift in aggregate supply.

Refer to the Information Provided in Figure 26