Use the figure below to answer the following question(s).
Figure 11-3
-Refer to Figure 11-3. When the economy is operating at point a, which of the following will be most likely to happen?
A)an increase in resource prices
B)a decrease in resource prices
C)the current output will be sustained in the future
D)an increase in aggregate demand

Question

Use the figure below to answer the following question(s).
Figure 11-3 
-Refer to Figure 11-3. When the economy is operating at point a, which of the following will be most likely to happen?
A)an increase in resource prices 
B)a decrease in resource prices 
C)the current output will be sustained in the future 
D)an increase in aggregate demand

Quizplus · Accepted Answer

An increase in resource prices will lead to a decrease in aggregate supply, which will shift the aggregate supply curve to the left. This will cause the equilibrium to move from point a to a point with a lower output and a higher price level.

Use the Figure Below to Answer the Following Question(s)