A Decrease In Aggregate Supply Can Lead To
A shock to the short-run aggregate market caused by a decrease in aggregate supply, resulting in and illustrated by a leftward shift of the short-run aggregate supply curve. A decrease in aggregate supply in the short-run aggregate market results in an increase in the price level and a decrease in real production. The short-run aggregate market presented in the graph to the right sets the stage for analyzing the effect of a decrease in aggregate supply resulting from a change in any aggregate supply determinant. In fact, as long as the shortages persist producers increase production,