If the money price of a resource such as oil falls, then the
A) LAS curve shifts rightward.
B) LAS curve shifts leftward.
C) SAS curve shifts leftward.
D) SAS curve shifts rightward.

Question

Quizplus · Accepted Answer

When the money price of a resource such as oil falls, the short-run aggregate supply (SAS) curve shifts rightward. This is because lower resource costs make production more profitable at any given price level, encouraging an increase in supply.

If the Money Price of a Resource Such as Oil