Macroeconomics Quiz: Cost Increase Impact
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Questions and Answers

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?

  • 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?

  • 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

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