Why Does the Short-Run Aggregate Supply Curve Shift to the Left

question 91

Multiple Choice

Why does the short-run aggregate supply curve shift to the left in the long run,following an increase in aggregate demand?

• A)Workers and firms adjust their expectations of wages and prices downward and they accept lower wages and prices.
• B)Workers and firms adjust their expectations of wages and prices downward and they push for higher wages and prices.
• C)Workers and firms adjust their expectations of wages and prices upward and they push for higher wages and prices.
• D)Workers and firms adjust their expectations of wages and prices upward and they accept lower wages and prices.

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Definitions:

Gestalt Psychology

A psychological approach that emphasizes the perception of whole objects rather than the individual elements.

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The process by which sensory stimuli are interpreted and organized in the brain to form a coherent picture of the world.

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Patterns and configurations denote the recognisable order in which things are arranged or occur, and the way elements are combined and oriented relative to one another.

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