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Questions and Answers
What is the effect of an increase in costs on aggregate supply?
What is the effect of an increase in costs on aggregate supply?
- It shifts aggregate supply to the left (correct)
- It shifts aggregate demand to the left
- It shifts aggregate supply to the right
- It shifts aggregate demand to the right
How does an increase in costs impact aggregate demand?
How does an increase in costs impact aggregate demand?
- It shifts aggregate supply to the right
- It shifts aggregate supply to the left (correct)
- It shifts aggregate demand to the right
- It has no impact on aggregate demand
What effect does an increase in costs have on the economy's overall production?
What effect does an increase in costs have on the economy's overall production?
- It has no impact on the economy's overall production
- It decreases the economy's overall production (correct)
- It increases the economy's overall production
- It depends on other factors unrelated to costs
