Question

The short-run aggregate supply curve is most likely to shift to the right if _____. rev: 06_12_2018 Multiple Choice productivity decreases input prices decrease sales taxes increase wages increase

Answer 1

Answer:

input prices decrease.

Explanation:

Aggregate supply is also called domestic final supply is the total supply of goods and services that is made available in an economy in a given period of time. It looks at the national supply of all goods and services.

If there is a decrease in input prices, supplier's cost of doing business reduces and he will have more money to engage in more production. This will result in increased production and a shift of aggregate supply curve to the right.

This is illustrated in the attached diagram.