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Chapter 24: Q 27. (page 602)

Name some factors that could cause the SRAS curve to shift, and say whether they would shift SRAS to the right or to the left.

Short Answer

Expert verified

There are various reasons for this condition to occur.

Step by step solution

01

Step 1. Definition

The SRAS (short-run aggregate supply) curve is a curve that shows that if there is an increase in price level and you will be moving along the SRAS, there will be an increase in the amount of real GDP which will be produced in an economy.

02

Step 2. Explanation

There are various reasons which cause the shift in the SRAS curve.

Reasons when SRAS curve shifts to the right are: improvement in productivity of the economy, decrease in input prices of the firms, good weather make a right shift in SRAS curve.

Reasons when the SRAS curve shifts leftwards are: an increase in the input prices in the economy, and exceptionally bad weather will cause a leftward shift in the SRAS curve.

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Most popular questions from this chapter

Briefly explain the reason for the near-vertical shape of the SRAS curve on its far right.

What is the intermediate zone of the SRAS curve? Will a rise in output be accompanied by a rise or a fall in the price level in this zone?

The short-run aggregate supply curve was constructed assuming that as the price of outputs increases, the price of inputs stays the same. How would an increase in the prices of important inputs, like energy, affect aggregate supply?

How is the natural rate of unemployment illustrated in an AD/AS model?

During spring 2016the Midwestern United States, which has a large agricultural base, experiences above-average rainfall. Using the AD/AS diagram, what is the effect on output, the price level, and employment?
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