An increase in costs will ?
Correct answer: B. Shift aggregate supply
- A. Shift aggregate demand
- B. Shift aggregate supply
- C. Reduce the natural rate of unemployment
- D. Increase the productivity of employees
Explanation
Higher production costs reduce firms’ willingness to supply at each price level, shifting aggregate supply leftward. Costs do not directly shift aggregate demand, alter the natural unemployment rate, or raise employee productivity.
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