Which of the following would shift the short-run aggregate supply curve to the right?
A)a decrease in the actual price level.
B)an increase in the actual price level.
C)a decrease in the expected price level.
D)an increase in the expected price level.

Question

Quizplus · Accepted Answer

A decrease in the expected price level would shift the short-run aggregate supply curve to the right. This is because firms will be willing to produce more goods and services at every price level if they anticipate lower input costs and lower prices for their products in the future. This shift represents an increase in aggregate supply in the short-run.

Which of the Following Would Shift the Short-Run Aggregate Supply