What will be the result if the largest foreign providers of steel increase the prices they charge U.S. buyers?
Multiple choice question.
The aggregate supply curve will shift to the right.
U.S, manufacturer profits will remain unchanged.
U.S. aggregate supply will decrease.
U.S. manufacturers will earn higher profits.
1 answer
The correct answer is:
U.S. aggregate supply will decrease.
If the largest foreign providers of steel increase their prices, it would increase the production costs for U.S. manufacturers who rely on steel. As a result, the overall aggregate supply in the U.S. would decrease, leading to a shift of the aggregate supply curve to the left.
