Which of the following events shifts the short-run aggregate-supply curve to the right?

Question

a. an increase in government spending on military equipment
b. an increase in price expectations
c. a drop in oil prices
d. a decrease in the money supply
e. none of the above

Answer 1

The event that shifts the short-run aggregate-supply curve to the right is:

c. a drop in oil prices

A drop in oil prices typically lowers production costs for many businesses, leading to an increase in supply at all price levels, which shifts the short-run aggregate-supply curve to the right. The other options listed either pertain to demand-side factors or would lead to increased costs or reduced supply.