The short-run aggregate supply curve will not shift to the left if
A) there is a significant decrease in worker productivity.
B) workers on fixed-wage contracts expect higher inflation.
C) the price of raw materials increases.
D) the price of capital goods rises.
E) wages rise in anticipation of higher prices.

Question

Quizplus · Accepted Answer

Expectations of higher inflation by workers on fixed-wage contracts do not directly affect the short-run aggregate supply curve, as these expectations might lead to demands for higher wages in the future but do not immediately change production costs or productivity.

The Short-Run Aggregate Supply Curve Will Not Shift to the Left