The SAS curve shifts if there is a change in
A) the price level.
B) real GDP.
C) nominal GDP.
D) potential GDP.

Question

Quizplus · Accepted Answer

The SAS (Short-Run Aggregate Supply) curve shifts if there is a change in potential GDP, as potential GDP reflects changes in the productive capacity of the economy, which affects the position of the SAS curve. Changes in the price level, real GDP, or nominal GDP affect the movement along the curve, not the position of the curve itself.

The SAS Curve Shifts If There Is a Change in