Short Run Aggregate Supply

What is Short Run Aggregate Supply (SRAS)?

• SRAS is the total demand for goods and services in an economy

• SRAS is the long-term supply curve in an economy

• SRAS is the total supply of goods and services that firms in an economy are willing and able to produce at different price levels in the short run.

• SRAS is the measure of inflation in an economy

List three factors that affect Short Run Aggregate Supply (SRAS).

• Demand, interest rates, government spending

• Input prices, productivity, expectations about future inflation

Explain the concept of shifts in the Short Run Aggregate Supply (SRAS) curve.

• Shifts in the SRAS curve are caused by changes in demand

• An increase in costs shifts the curve right

• Shifts in the SRAS curve are caused by changes in production costs. An increase in costs shifts the curve left, decreasing aggregate supply, while a decrease shifts it right, increasing aggregate supply.

• A decrease in costs shifts the curve left

How does an increase in input prices affect the Short Run Aggregate Supply (SRAS) curve?

• The SRAS curve will remain unchanged.

• The SRAS curve will shift to the left.

• The SRAS curve will become steeper.

• The SRAS curve will shift to the right.

Discuss the relationship between Short Run Aggregate Supply (SRAS) and the price level.

• In the short run, there is a positive relationship between SRAS and the price level.

• The price level increases exponentially with SRAS in the short run.

• SRAS has no impact on the price level in the short run.

• In the short run, there is a negative relationship between Short Run Aggregate Supply (SRAS) and the price level.

What role does technology play in influencing Short Run Aggregate Supply (SRAS)?

• Technology reduces Short Run Aggregate Supply (SRAS) by decreasing productivity.

• Technology decreases Short Run Aggregate Supply (SRAS) by increasing production costs.

• Technology has no impact on Short Run Aggregate Supply (SRAS).

• Technology increases Short Run Aggregate Supply (SRAS) by improving productivity and reducing production costs.

Explain the impact of government regulations on Short Run Aggregate Supply (SRAS).

• Government regulations can increase production costs, leading to a leftward shift in the SRAS curve.

• Government regulations decrease production costs, leading to a rightward shift in the SRAS curve.

• Government regulations lead to a decrease in demand, causing an upward shift in the SRAS curve.

• Government regulations have no impact on Short Run Aggregate Supply (SRAS).

How does an improvement in productivity affect the Short Run Aggregate Supply (SRAS) curve?

• The SRAS curve shifts to the left.

• The SRAS curve becomes steeper.

• The SRAS curve shifts to the right.

• The SRAS curve becomes flatter.

Describe the difference between Short Run Aggregate Supply (SRAS) and Long Run Aggregate Supply (LRAS).

• SRAS is determined by technology, while LRAS is influenced by prices

• SRAS is short-term, influenced by prices and production costs, while LRAS is long-term, determined by factors like technology, resources, and institutions.

• SRAS is long-term, while LRAS is short-term

• SRAS is influenced by factors like resources, while LRAS is determined by production costs

How does a decrease in production costs impact the Short Run Aggregate Supply (SRAS) curve?

• The SRAS curve remains unchanged.

• The SRAS curve shifts to the left.

• The SRAS curve becomes steeper.

• The SRAS curve shifts to the right.