PRC-3 · Chapter 13 · Question 33 of 50
Which of the following macroeconomic events is most likely to cause a severe decrease (leftward shift) in a country's short-run Aggregate Supply?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) A massive increase in wage costs per unit of output
Explanation
An increase in production costs (like wages or raw materials) makes it more expensive for firms to produce, shifting the aggregate supply curve to the left.
More National Income and Its Determination MCQs
- Q35If the sale value of final goods by firms is Rs. 45 billion, and they purchased Rs. 10 billion worth of intermediate materials from…
- Q36Why do national statisticians strictly exclude 'unemployment benefits' and 'state pensions' when calculating the Gross Domestic Product?
- Q37If a country's Nominal GDP grows by 10% in a year, but the general price level (inflation) also rises by exactly 10%, what has happened to…
- Q38Which of the following events would cause an economy's Aggregate Demand (AD) curve to definitively shift to the right?
- Q39According to Keynesian macroeconomic theory, when an economy reaches its absolute physical limit of full employment, its Long-Run…