PRC-3 · Chapter 13 · Question 21 of 50
According to aggregate economic theory, what specifically causes the short-run aggregate supply (SRAS) curve to shift to the left?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) A sudden, massive increase in the cost of raw materials or wages
Explanation
An increase in production costs (like raw materials or wages) makes it more expensive to produce goods, shifting the SRAS curve inward to the left.
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