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:

Gut Feelings

Intuitive judgments and responses that are not the result of conscious reasoning.

Leipzig, Germany

A city in the federal state of Saxony, Germany, known for its rich cultural heritage, including music, art, and its role in the history of philosophy and psychology.

Phrenology

A now-discredited theory that suggested the shape and size of the human skull could determine personality traits and mental abilities.

Pseudoscience

Claims, beliefs, or practices presented as scientific but lacking empirical evidence or scientific method.