Which of the Following Causes a Leftward Shift in the Short-Run

question 167

Multiple Choice

Which of the following causes a leftward shift in the short-run aggregate supply curve?

• A) an increase of goods prices while nominal incomes are unchanged
• B) an increase in nominal incomes (wages and salaries)
• C) an increase of full-employment real GDP
• D) an increase of personal consumption expenditures while the price level is unchanged

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Definitions:

Consumers Budget Constraint

A consumer's budget constraint represents the combination of goods and services they can afford with their income and prices.

Adverse Selection

A situation in economic theory where information asymmetry results in high-risk individuals being more likely to apply for insurance or credit, potentially leading to market failure.

Insurance

A financial product that provides protection against potential future losses or damages to individuals or property.

Klutzes

Describes persons who are clumsy, often making mistakes or causing accidents in a somewhat comical or endearing way.