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, there is typically unused capacity and resources, which can lead to an increase in production as firms respond to lower costs and higher demand, causing the short-run aggregate supply curve to shift right.

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