-In the above figure, the short- run aggregate supply curve is SAS₁. If the prices of resources fall, there is A) a shift to SAS₂. B) a shift to SAS₀. C) a downward movement along SAS₁. D) an upward movement along SAS₁.

Question

Quizplus · Accepted Answer

When resource prices fall, production becomes cheaper, leading to an increase in aggregate supply. This results in a rightward shift of the short-run aggregate supply curve from SAS₁ to SAS₂.

-In the Above Figure, the Short- Run Aggregate Supply Curve