2.3.2: Short-Run AS

Question 1

The main cause of a shift in SRAS is a ________ in the costs of ________.

Answer 1

Change, production.

Question 1

What are the factors that cause a shift in the AS curve?

Answer 1

-Changes in the costs of raw materials.
-Changes in exchange rates.
-Changes in tax rates.

Question 2

How does changes in costs of raw materials cause a shift in the AS curve?

Answer 2

An increase in the costs of raw materials increases the costs of production, so the AS curve shifts inwards.

Question 3

How does a change in exchange rates cause a shift in the AS curve?

Answer 3

A weaker pound increases the price of imports, so the AS curve shifts inwards.

Question 4

How does a change in tax rates cause a shift in the AS curve?

Answer 4

An increase in tax rates increases the costs of production, so the AS curve shifts inwards.