Question

Which of the following could decrease equilibrium Real GDP and increase the price level? Select one: a. An increase in the value of the Canadian dollar, all else equal b. An increase in productivity. c. Businesses expect lower profits in the future. d. Firms experience an increase in wages

Answer 1

The correct option is D.

Firms experience an increase in wages

Step-by-step explanation:

When firms experience an increase in wages, cost of production increases so supply shifts to the left.