When Production Costs Rise

question 96

Multiple Choice

When production costs rise,

• A)the short-run aggregate supply curve shifts to the right.
• B)the short-run aggregate supply curve shifts to the left.
• C)the aggregate demand curve shifts to the right.
• D)the aggregate demand curve shifts to the left.

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Definitions:

Foreign Competition

Refers to the competitive pressure that domestic companies face from foreign companies in the same industry, impacting market share, pricing, and innovation strategies.

Tariffs

Taxes imposed on imported goods, often used to protect domestic industries or generate revenue.

Imported Goods

Products brought into one country from another for the purpose of sale or trade.

Trade Imbalance

Trade imbalance occurs when there is a significant difference between a country's imports and exports, affecting its economic health.