Which of the following shifts the short-run aggregate and the long-run aggregate supply left?
A)a decrease in the price level
B)a decrease in the expected price level
C)a decrease in the capital stock
D)a decrease in the money supply

Question

Quizplus · Accepted Answer

A decrease in the capital stock shifts both short-run and long-run aggregate supply leftward. This is because a decrease in the capital stock reduces the productive capacity of the economy, leading to decreased output in both the short and long run. The other choices would shift aggregate supply rightward (A and B) or affect aggregate demand (D).

Which of the Following Shifts the Short-Run Aggregate and the Long-Run