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Which of the following shifts the short-run aggregate supply curve? A
Which of the following shifts the short-run aggregate supply curve? A. a change in short-run aggregate demand B. a change in the price of oil C. a change in the overall price level D. all of the above
Expert Solution
The answer is B).
A change in short run AD doesn't have to do anything with short run AS. So, option A can be ruled out.
A change in overall price will lead to a movement along the short run AS and it won't shift short run AS curve. Thus, option C can be ruled out.
Since options A and C are wrong, option D can automatically be ruled out.
Therefore, correct answer is B.
A change in price of oil changes the cost of production, thus firms adjust their production according to change in price of oil and therefore it shifts short run AS curve.
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