Figure 12.1 Aggregate Supply and Aggregate Demand -Refer to Figure 12.1. The shift from AS₀ to AS₁ could have been caused by A) an increase in government spending B) an increase in oil prices C) an increase in the number of businesses D) technological improvements

Question

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An increase in oil prices can cause the aggregate supply curve to shift leftward from AS₀ to AS₁ due to higher production costs, reducing the overall supply of goods and services in the economy.