CFA Practice Question

There are 539 practice questions for this study session.

CFA Practice Question

A decrease in resource prices will ______ short-run aggregate supply and ______ long-run aggregate supply.
A. increase; increase
B. increase; not affect
C. not affect; increase
Explanation: The size of the economy's resource base changes the long-run aggregate supply and resource prices change the short-run aggregate supply. Unless the lower prices of resources reflect a long-term increase in the supply of resources, they will not alter long-run aggregate supply.

User Contributed Comments 1

User Comment
MaiHuong Decrease in resource price doesn't mean increase in resource supply in long term
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