Which one of the following will decrease aggregate supply, thereby shifting the curve left?
A) Nominal wages decrease as a result of an increased labor supply.
B) The productivity of workers decreases as a result of an epidemic.
C) A new government policy decreases business taxes.
D) The price of oil, which is a major input into most production activities, decreases.

Question

Quizplus · Accepted Answer

A decrease in worker productivity, such as from an epidemic, would reduce the amount of goods and services that can be produced at any given price level, thus shifting the aggregate supply curve to the left.

Which One of the Following Will Decrease Aggregate Supply, Thereby