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How does increased oil prices affect SRAS?
Increased oil prices lead to a decrease in SRAS (shift left) because they increase production costs.
How do increased government regulations affect SRAS?
Increased regulations often lead to a decrease in SRAS (shift left) because they increase production costs.
How do technological improvements affect SRAS?
Technological improvements lead to an increase in SRAS (shift right) because they allow for more output.
How does increased productivity affect SRAS?
Increased productivity leads to an increase in SRAS (shift right) because more output is produced per worker.
If consumer income increases, causing the GDP deflator to rise, what happens to SRAS?
There is a movement *along* the SRAS curve. This is a change in the price level, not a shift of the curve.
How does a war that destroys coal refineries affect SRAS?
It decreases SRAS because resource availability decreases.
What is the impact of subsidies on SRAS?
Increased subsidies often lead to an increase in SRAS (shift right) because they lower costs for firms.
What is the impact of higher taxes on businesses on SRAS?
Higher taxes on businesses will decrease SRAS (shift left).
What is the impact of lower taxes on businesses on SRAS?
Lower taxes on businesses will increase SRAS (shift right).
What is SRAS?
The total quantity of goods and services firms are willing and able to produce at various price levels in the short run.
What does 'sticky' wages mean in the context of SRAS?
Wages and resource prices don't adjust immediately to changes in the price level in the short run.