Aggregate supply is the supply of all goods and services within a country. Which of the following would most likely cause a decrease in the aggregate supply
A decrease in aggregate supply can be caused by several factors, including an increase in production costs, such as wages or raw materials, which can reduce businesses' ability to produce goods. Additionally, supply chain disruptions, natural disasters, or government regulations that impose stricter operational standards can hinder production capabilities. Furthermore, a decline in the availability of key inputs, such as labor shortages or resource depletion, can also contribute to a decrease in aggregate supply.
if decrease a price or if the expectation of raising a price
the curve would shift to the right
An increase in supply will cause a decrease in demand. The value of what is being supplied would also drop.
raising of interest rates
A decrease in aggregate supply can be caused by several factors, including an increase in production costs, such as wages or raw materials, which can reduce businesses' ability to produce goods. Additionally, supply chain disruptions, natural disasters, or government regulations that impose stricter operational standards can hinder production capabilities. Furthermore, a decline in the availability of key inputs, such as labor shortages or resource depletion, can also contribute to a decrease in aggregate supply.
if decrease a price or if the expectation of raising a price
the curve would shift to the right
Decrease in the price of Fuzzy Wuzzy.
An increase in supply will cause a decrease in demand. The value of what is being supplied would also drop.
raising of interest rates
Decrease in computer resources cost.
Producers expectation of a computer prince increase.
An example would be a decrease in the price of book binding glue.
leftward
The company decides to go into a different line of business.
Keynesian model- where AS is upward sloping, GDP will decrease and inflation will either increase or decrease, this depends on which decrease is larger.. Neo classical- GDP will remain the same and price level decreases. The first answer is the one you would use in a class. Try drawing them out and seeing what happens, shift both curves to the left, put Y(GDP) on the x axis and Inflation(Price level) on the y axis.