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

question 18

Multiple Choice

Why does the short-run aggregate supply curve shift to the right in the long run, following a decrease 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.
• E)Workers and firms adjust their expectations of output and price levels upward and they thus accept lower output as normal.

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