Which of the following events will lead to an inward shift of the aggregate supply curve?
A)An increase in the price level
B)An increase in consumer spending
C)An increase in labor productivity
D)An increase in wage rates

Question

Quizplus · Accepted Answer

An increase in wage rates will lead to an increase in production costs for firms. This will cause the firms to produce less output at any given price level, resulting in an inward shift of the aggregate supply curve. Choices A and B would shift the aggregate demand curve while an increase in labor productivity (Choice C) would shift the aggregate supply curve outwards.

Which of the Following Events Will Lead to an Inward