If the economy's current level of output is below its potential level of output, the short-run aggregate supply curve:
A)will shift right.
B)will shift left.
C)will be vertical.
D)does not matter; only the long-run aggregate supply curve matters in this situation.

Question

Quizplus · Accepted Answer

When the economy's output is below its potential, resources are underutilized, leading to lower costs and prices, which can cause the short-run aggregate supply curve to shift right as firms increase production.

If the Economy's Current Level of Output Is Below Its