An unexpected increase in the price level does not shift the aggregate-supply curve, but an expected increase in the price level shifts the aggregate-supply curve to the left.

Question

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An unexpected increase in the price level affects the short-run aggregate supply because producers might temporarily increase production due to higher prices, but it doesn't shift the curve itself. An expected increase in the price level can lead to a leftward shift in the aggregate-supply curve as producers anticipate higher costs and might reduce the quantity supplied at every price level.

An Unexpected Increase in the Price Level Does Not Shift