Which of the following shifts short-run aggregate supply left?
A)an increase in the actual price level
B)an increase in the expected price level
C)an increase in the capital stock
D)None of the above is correct.

Question

Quizplus · Accepted Answer

An increase in the expected price level will cause workers and firms to negotiate higher wages and prices, resulting in increased production costs and a leftward shift of short-run aggregate supply. Options A and C would both shift short-run aggregate supply to the right, so they are incorrect. Option D is also incorrect since at least one of the other options is correct.

Which of the Following Shifts Short-Run Aggregate Supply Left