-Refer to Figure 15-13.Starting from point A,suppose a supply shock shifts the aggregate supply curve to AS₂.In the short run,this will A) decrease real GDP,increase the price level,lower wages,and return the aggregate supply curve to AS₁ B) increase real GDP,decrease the price level,increase wages,and return the aggregate supply curve to AS₁ C) decrease real GDP and increase the price level D) increase real GDP and decrease the price level E) lower the full employment level of real GDP to Y₂

Question

Quizplus · Accepted Answer

A supply shock that shifts the aggregate supply curve to the left (as indicated by AS₂) typically results in a decrease in real GDP and an increase in the price level, due to the reduced supply of goods and services at any given price level.