header bg


Which of the following events is most likely to increase short-run aggregate supply (shift the curve to the right)?

A High unemployment puts downward pressure on money wages.

Falling money wages would cause businesses to increase (profit-maximizing) output levels at each price level for final goods and services. Changes in the price level of goods and services are represented by a movement along a short-run aggregate supply curve, not a shift in the curve. A rise in resource prices will decrease aggregate supply.
An increase in government spending will shift the aggregate demand curve but not the aggregate supply curve.