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Macro Exam Q16 Picture.pdf In the attached diagram, a shift in AS fro.pdf

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An increase in consumption can cause a shift in the aggregate supply (AS) curve from the solid line to the dashed line. Higher consumption leads to higher price levels as demand increases when other factors remain constant. An increase in consumption is the only option provided that can cause the AS curve to shift left, representing higher prices.

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Macro Exam Q16 Picture.pdf In the attached diagram, a shift in AS from the solid line to the dashed line might be caused by a(n): O a. Increase in productivity O b. Increase in the price of oil b. Increase in the price of oil C.Increase in consumption C. Increase in consumption O d. Increase in nominal wages Solution option C is correct. an increase in consumption leads to increase in price levels. means if the consumption is high, when all the remaining will be constant the prices will go up.

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