Refer to the information provided in Figure 12.3 below to answer the questions that follow. Figure 12.3
-Refer to Figure 12.3.A decrease in aggregate supply is represented by
A)a movement from Point B to Point A along AS1.
B)a movement from Point B to Point C along AS1.
C)a shift from AS1 to AS2.
D)a shift from AS1 to AS0.

Question

Refer to the information provided in Figure 12.3 below to answer the questions that follow.  Figure 12.3
-Refer to Figure 12.3.A decrease in aggregate supply is represented by
A)a movement from Point B to Point A along AS1. 
B)a movement from Point B to Point C along AS1. 
C)a shift from AS1 to AS2. 
D)a shift from AS1 to AS0.

Quizplus · Accepted Answer

A decrease in aggregate supply is represented by a shift from AS1 to AS2, as shown in the figure. Choice A represents a movement from Point B to Point A along AS1, which represents a decrease in quantity supplied but not a decrease in aggregate supply. Choice B represents a movement from Point B to Point C along AS1, which represents an increase in quantity supplied but not a decrease in aggregate supply. Choice D represents a shift from AS1 to AS0, which represents a decrease in technology, resources or productivity, but not a decrease in aggregate supply.

Refer to the Information Provided in Figure 12