If aggregate supply shifts to the left, which effects occur?

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Multiple Choice

If aggregate supply shifts to the left, which effects occur?

Explanation:
A leftward shift in aggregate supply means the economy can produce fewer goods and services at every price level, usually because of higher costs or resource constraints. With less output, unemployment tends to rise since fewer workers are needed. At the same time, prices rise because the decreased supply creates inflationary pressure across the economy. When inflation rises at the same time as output falls and unemployment increases, you have stagflation. So all of these effects occur together, making all of the above the best description.

A leftward shift in aggregate supply means the economy can produce fewer goods and services at every price level, usually because of higher costs or resource constraints. With less output, unemployment tends to rise since fewer workers are needed. At the same time, prices rise because the decreased supply creates inflationary pressure across the economy. When inflation rises at the same time as output falls and unemployment increases, you have stagflation. So all of these effects occur together, making all of the above the best description.

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