-Refer to Figure 15-13.Starting from point A,suppose a supply shock shifts the aggregate supply curve to AS₂.In the short run,this will
A) decrease real GDP,increase the price level,lower wages,and return the aggregate supply curve to AS1
B) increase real GDP,decrease the price level,increase wages,and return the aggregate supply curve to AS1
C) decrease real GDP and increase the price level
D) increase real GDP and decrease the price level
E) lower the full employment level of real GDP to Y2.

Question

-Refer to Figure 15-13.Starting from point A,suppose a supply shock shifts the aggregate supply curve to AS₂.In the short run,this will
A) decrease real GDP,increase the price level,lower wages,and return the aggregate supply curve to AS1 
B) increase real GDP,decrease the price level,increase wages,and return the aggregate supply curve to AS1 
C) decrease real GDP and increase the price level 
D) increase real GDP and decrease the price level 
E) lower the full employment level of real GDP to Y2.

Quizplus · Accepted Answer

A supply shock that shifts the aggregate supply curve to AS₂ typically results in a decrease in real GDP and an increase in the price level in the short run, as it represents a leftward shift of the supply curve, indicating reduced supply and higher prices.