Exhibit 10.1 -Refer to Exhibit 10.1, Which Shows the Short-Run Aggregate Supply

Multiple Choice

Exhibit 10.1

-Refer to Exhibit 10.1, which shows the short-run aggregate supply (SRAS) curve of an economy. What happens to short-run aggregate supply if prices are higher than expected?

A) SRAS shifts right.
B) SRAS shifts left.
C) There is an upward movement along SRAS to Y₃.
D) There is a downward movement along SRAS to Y₂.
E) Nothing happens in the short run.