When an economy self-corrects from a recession, the _____ curve shifts:
A) short-run aggregate supply; rightward.
B) short-run aggregate supply; leftward.
C) aggregate demand; rightward.
D) aggregate demand; leftward.

Question

Quizplus · Accepted Answer

When an economy self-corrects from a recession, the short-run aggregate supply (SRAS) curve shifts rightward. This is because, in response to a recession, factors such as lower wages and input prices eventually make production more profitable, leading firms to increase output.

When an Economy Self-Corrects from a Recession, the _____ Curve