An increase in aggregate supply can be caused by an increase in the price level.

Question

Quizplus · Accepted Answer

An increase in aggregate supply is typically caused by factors such as improvements in technology, increases in the quantity or quality of resources (including labor and capital), or reductions in the costs of production, rather than by an increase in the price level. An increase in the price level is more closely associated with movements along the aggregate supply curve rather than shifts of the curve itself.

An Increase in Aggregate Supply Can Be Caused by an Increase