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suter [353]
3 years ago
12

Pessimism Suppose the economy is in long-run equilibrium. Then because of corporate scandal, international tensions, and loss of

confidence in policymakers, people become pessimistic regarding the future and retain that level of pessimism for some time. Refer to Pessimism. In the long run, the change in price expectations created by pessimism shifts a. short-run aggregate supply left. b. short-run aggregate supply right. c. long-run aggregate supply left. d. long-run aggregate supply right.
Business
1 answer:
galben [10]3 years ago
3 0

Answer:

a. short-run aggregate supply left.

Explanation:

<u>Aggregate Supply</u> is the total quantity of goods & services, all the sellers in economy are planning to sell, in an economy during a period of time. Short Run Aggregate Supply is upward sloping, as supply is directly related to price level.

If there is future <u>pessimism </u>in economy; due to corporate scandal, international tensions, and loss of confidence in policymakers. Then, producers will be apprehensive about their products sale, will also feel price vulnerable. This would imply that the short run aggregate supply would decrease, the  SRAS curve would shift leftwards.

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When adopting an expansionist strategy the company is trying to achieve a higher sales growth rate than before. Since it took several new big contracts it will probably have to hire several (or very many) new employees and they need to do it fast. Usually when this happens, the company will try to hire the best possible applicants from the fastest recruiting source.

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