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C) A Leftward Shift in Short-Run Aggregate Supply: Causes, Effects, and Economic Implications In macroeconomics, the short-run aggregate supply (SRAS) curve plays a critical role in analyzing how economies react to changes in demand, costs, and expectations. A key concept in this framework is a leftward shift in short-run aggregate supply, which signals a decline in the economy’s capacity to produce goods and services—often associated with supply shocks, rising costs, and reduced productivity. Understanding this shift is essential for policymakers, businesses, and investors navigating inflationary pressures and growth challenges. ### What Causes a Leftward Shift in Short-Run Aggregate Supply? A leftward shift in SRAS occurs when, at every price level, the quantity of real GDP supplied decreases. Several factors can drive this shift, including: