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

question 173

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.
• E)Workers and firms adjust their expectations of output downward, firms accept lower profits, and workers accept lower wages.

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