Question

Which of the following would shift the long run aggregate supply curve to the left? Decrease...

  1. Which of the following would shift the long run aggregate supply curve to the left?

Decrease in consumption

Decrease in the wage rate

Decrease in resources

Decrease in profit.

All of the following would cause a decrease in the aggregate demand except

Increase in interest rates

Household wealth falls

Dollar depreciates relative to foreign currencies

Increase in tax rates.   

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Answer #1

Q1
Answer
Option 3
A long-run aggregate supply curve depicts the potential output level. A potential output level is produced using all the available resources in the economy and decrease in it decreases LRAS and shifts to left.
A decrease in consumption shifts AD to left.
a decrease in wage rate shifts SRAS to left
decrease in profit decreases AS and shifts to left.
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Q2
Answer
Option

Increase in interest rates or Household wealth falls or Increase in tax rates decreases the consumption and investment spending. It decreases AD and shifts to the left

Dollar depreciates relative to foreign currencies increases export as the prices for foreigners decreases and export increases which increases AD and shifts AD to right.

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