The Aggregate Supply Curve Shifts

question 257

Multiple Choice

The aggregate supply curve shifts

• A)rightward if potential GDP decreases.
• B)rightward if the money wage rate falls.
• C)rightward if the money wage rate rises.
• D)leftward if potential GDP increases.
• E)leftward if the aggregate demand curve shifts leftward.

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Definitions:

Moral Hazard

The tendency of individuals or entities to take riskier actions when they do not bear the full consequences of those actions, often due to having some form of insurance or protection.

Health Insurance

An insurance plan that covers the medical and surgical costs of the policyholder.

Consumers

Individuals or entities that use goods and services produced within an economy.

Government Tax Subsidy

Financial assistance from the government, often in the form of reduced taxes, to encourage or support particular economic activities.