When workers' wages and other resource costs decrease, what happens to the short-run aggregate supply curve?

When workers' wages and other resource costs decrease, it results in a reduction of production costs for firms. This reduction in costs allows businesses to produce more goods and services at every price level. Consequently, the short-run aggregate supply curve shifts to the right.

A rightward shift in the aggregate supply curve indicates an increase in overall supply in the economy, which can lead to lower prices and increased output in the short run. This dynamic illustrates how changes in input costs, like wages, directly affect production capabilities and market supply. Thus, the correct understanding of this relationship confirms that a decrease in resource costs will indeed shift the short-run aggregate supply curve to the right, reflecting a higher level of output available at any given price level.