ECONOMICS
AGGREGATE DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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a decrease in the money supply
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a drop in oil prices
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an increase in government spending on military equipmentd
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an increase in price expectations
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Detailed explanation-1: -A higher level of productivity shifts the SRAS curve to the right because with improved productivity, firms can produce a greater quantity of output at every price level.
Detailed explanation-2: -Which of the following will shift the short-run aggregate supply curve to the right? An economy-wide decrease in commodity prices. The short-run aggregate supply curve may shift to the right if: productivity increases.
Detailed explanation-3: -A fall in business taxes decreases the per-unit production costs. Lower production costs will increase the aggregate supply in the economy. The aggregate supply curve will shift to the right.
Detailed explanation-4: -What causes shifts in SRAS? When the price level changes and firms produce more in response to that, we move along the SRAS curve. But, any change that makes production different at every possible price level will shift the SRAS curve. Events like these are called “shocks” because they aren’t anticipated.