ECONOMICS
AGGREGATE DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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consumption
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government purchases
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overall costs of production
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All of the above
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Detailed explanation-1: -The SRAS curve shows that as the price level increases and you move along the SRAS, the amount of real GDP that will be produced in an economy increases. An increase in the SRAS is shown as a shift to the right.
Detailed explanation-2: -An increase in the expected price level reduces the quantity of goods and services supplied and shifts the short-run aggregate supply curve to the left.
Detailed explanation-3: -Answer and Explanation: The answer is A). A temporary increase in input price will make production more expensive in the short run; as a result, firms cut down on production. The short-run aggregate supply curve, therefore, shifts to the left.
Detailed explanation-4: -A decrease in aggregate demand will cause the short-run aggregate supply curve shift to rightward or downward direction because workers and firms will adjust their expectation of wages and prices downwards and they will accept lower wages and prices.
Detailed explanation-5: -Changes in resource prices. If the price of oil and other factors of production decrease (those that are not sticky) then firms will seek to produce more. Technology changes. Expectation of future prices.