What Is the Effect of an Increase in Input Prices

question 109

Multiple Choice

What is the effect of an increase in input prices on the short-run aggregate supply curve?

• A)It shifts rightward, which means the quantity supplied at any price level increases.
• B)It shifts leftward, which means the quantity supplied at any price level increases.
• C)It shifts rightward, which means the quantity supplied at any price level declines.
• D)It shifts leftward, which means the quantity supplied at any price level declines.

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Definitions:

Productive Resources

Factors used in the production of goods and services, which include labor, capital, and natural resources.

Additional Truck

Refers to an extra vehicle that may be required for operational purposes, often to increase capacity or meet growing demand.

Production Possibilities Curve

A visual depiction illustrating the highest possible mix of products or services that can be generated using a set amount of resources and technology within a specified timeframe.

Economy's Capacity

The maximum level of output that an economy can produce without leading to inflation, utilizing its available resources efficiently.