Suppose that real domestic output in an economy is 20 units, the quantity of inputs is 10, and the price of each input is $4.Refer to the above information.Given an increase in input price from $4 to $6, we would expect the aggregate:
A)supply curve to shift to the left.
B)supply curve to shift to the right.
C)demand curve to shift to the left.
D)demand curve to shift to the right.

Question

Quizplus · Accepted Answer

An increase in input price will cause an increase in production costs, which will result in a decrease in supply. Therefore, the supply curve will shift to the left.

Suppose That Real Domestic Output in an Economy Is 20