What will be the effect of a leftward shift in the AS curve?
A)It will shift the LAS curve left.
B)It will cause a rise in the price level.
C)It might be caused by a decrease in resource prices.
D)It will not affect output levels.

Question

Quizplus · Accepted Answer

A leftward shift in the Aggregate Supply (AS) curve indicates that the total supply of goods and services at each price level has decreased. This typically leads to higher prices, as the same amount of money is chasing fewer goods and services, causing inflation. Hence, it will cause a rise in the price level.

What Will Be the Effect of a Leftward Shift in the AS Curve