Starting at long run equilibrium, ceteris paribus, an increase in the costs ofwidely used factors of production would most likelyO Increase short run aggregate supply and create an inflationary gap.O Decrease long run aggregate supply and create a recessionary gap.O Decrease short run aggregate supply and create a recessionary gap.O Decrease aggregate demand and create a recessionary gap.

Cost of production is a non price determinant for aggregate supply. Changes in the cost of…

Starting at long run equilibrium, ceteris paribus, an increase in the costs of widely used factors of production would most likely Increase short run aggregate supply and create an inflationary gap. Decrease long run aggregate supply and create a recessionary gap. Decrease short run aggregate supply and create a recessionary gap. O Decrease aggregate demand and create a recessionary gap.

Starting at long run equilibrium, ceteris paribus, an increase in the costs of widely used factors of production would most likely Increase short run aggregate supply and create an inflationary gap. Decrease long run aggregate supply and create a recessionary gap. Decrease short run aggregate supply and create a recessionary gap. O Decrease aggregate demand and create a recessionary gap.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter23: Aggregate Demand And Aggregate Supply

Section: Chapter Questions

Problem 3CQQ

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