When production costs rise, in the short run: Is the answer D or E? When production...

When production costs rise, in the short run: Is the answer D or E?

When production costs rise, in the short run:

		A. the aggregate-supply curve shifts down to the right
		B. the aggregate-demand curve shifts down to the left
		C. the aggregate-demand curve shifts up to the right
		D. the aggregate-supply curve shifts up to the left
		E. both the aggregate-demand curve and the aggregate-supply curve shift to the left

Expert Solution

Answer : The answer is option D.

When production cost increase then producers decrease their production level. As a result, the aggregate supply decrease which shift the aggregate supply curve to leftward. Therefore, option D is correct.

Rahul Sunny answered 2 years ago

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When production costs rise, in the short run: Is the answer D or E? When production...

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Expert Solution

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