An increase in input productivity will
A)shift the aggregate supply curve leftward.
B)reduce the equilibrium price level, assuming downward flexible prices.
C)reduce the equilibrium real output.
D)reduce aggregate demand.

Question

Quizplus · Accepted Answer

An increase in input productivity will reduce the cost of production, which will lead to a decrease in the equilibrium price level, assuming downward flexible prices.

An Increase in Input Productivity Will