Which of the following correctly identifies components that cause shifts of aggregate supply?

A. Changes in the price of inputs, productivity, and consumption
B. Changes in governmentpurchases, short-run supply shocks, and investment in stocks and bonds
C. Changes in consumption expenditures, investment, and net exports
D. Changes in the price of inputs, short-run supply shocks, and productivity

1 answer

The correct answer is:

D. Changes in the price of inputs, short-run supply shocks, and productivity.

These factors are all essential components that can cause shifts in the aggregate supply curve. Changes in input prices can affect production costs, short-run supply shocks (like natural disasters or sudden increases in oil prices) can disrupt supply, and improvements or declines in productivity can alter how efficiently an economy can produce goods and services.