Shifting the Short-Term Aggregate Supply

Question 1

increase

Answer 1

in the costs of production (wages or other costs go up) produces a shift to the left in the short term aggregate supply curve

Question 2

decrease

Answer 2

in the costs of production (wages or other costs go down–often due to innovation that streamlines production) causes the curve to shift to the right

Question 3

government

Answer 3

• can also affect the short term aggregate supply curve
• tax increase can shift the curve to the left
• subsidy (government grants capital to a business or producer) can shift the curve to the right

Question 4

contraction

Answer 4

(shrinking) shift to the left

Question 5

expansion

Answer 5

(growing) shift to the right

Question 6

shift to the left

Answer 6

• increase in wages

Question 7

shift to the right

Answer 7

• decrease in taxation

Question 8

NOT a factor

Answer 8

• changes in income
• change in number of producers
• change in consumer tastes

Question 9

if govt. taxes go up, what will happen to the average price level

Answer 9

go up

Question 10

plays a role

Answer 10

change in worker wages