Use the figure below to answer the following question.

Figure 28.2.1
-Refer to Figure 28.2.1. The figure illustrates an economy initially in equilibrium at the intersection of the SAS₀ curve and the AD₀ curve. Which of the following shifts the short-run aggregate supply curve from SAS₀ to SAS₁?
A)an increase in the price of oil
B)an increase in the price level
C)an increase in the marginal product of labour
D)an increase in the demand for money
E)a decrease in the money wage rate

Question

Use the figure below to answer the following question.
  
Figure 28.2.1
-Refer to Figure 28.2.1. The figure illustrates an economy initially in equilibrium at the intersection of the SAS₀ curve and the AD₀ curve. Which of the following shifts the short-run aggregate supply curve from SAS₀ to SAS₁?
A)an increase in the price of oil 
B)an increase in the price level 
C)an increase in the marginal product of labour 
D)an increase in the demand for money 
E)a decrease in the money wage rate

Quizplus · Accepted Answer

An increase in the price of oil will increase the production costs for firms, leading to a decrease in short-run aggregate supply. This will shift the SAS curve from SAS₀ to SAS₁. The other choices do not directly affect the short-run aggregate supply curve.

Use the Figure Below to Answer the Following Question