Which situation results in a leftward shift of the short-run aggregate supply curve?

A leftward shift of the short-run aggregate supply curve indicates a decrease in the quantity of goods and services that firms are willing and able to supply at a given price level. This shift can be caused by various factors, and one key factor is the increase in nominal wages.

When nominal wages rise, the cost of production for firms increases because they now have to pay their workers more. Higher production costs typically lead firms to supply less at the same price levels, as they aim to maintain profitability. Consequently, this results in a leftward shift of the short-run aggregate supply curve.

In contrast, an increase in average worker productivity or a decrease in resource prices would encourage firms to supply more goods and services, shifting the curve to the right. A decrease in demand for goods affects the overall demand side of the economy rather than impacting the supply curve directly. Thus, while the other scenarios do not lead to a leftward shift, the increase in nominal wages distinctly causes that contraction in short-run aggregate supply.