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) increased stock prices that cause households to spend less and save more B) increased unionization of workers that raises average wages C) a recession in trading-partner countries, causing them to import less D) busineeses cut their spending for new equipment during a recession

Question

Quizplus · Accepted Answer

An increase in unionization that raises wages would increase production costs, causing the aggregate supply curve to shift left from AS₀ to AS₁.