Answer to Question #80791 in Macroeconomics for AYANDA

Question

Which one of the following statements regarding the aggregate supply is/are correct?

a) An increase in the cost of labour will result in a decrease in both aggregate supply and the general price level.
b) A decrease in the prices of imported capital will cause an increase in the aggregate supply and a decrease in the general price level.
c) A decrease in productivity will cause a decrease in the aggregate supply and a decrease in the general price level.

1) b and c
2) a and c
3) b
4) a
5) All the statements are correct

Answer 1

Statement b) is correct.