7.5 The determinants of SRAS Flashcards
1
Q
What are the 4 factors of production?
A
Land
Labour
Enterprise
Capital
2
Q
What are the main determinants of SRAS?
A
Price level and production cost
3
Q
What factors change production costs?
A
Changes in costs, such as: money wage rates, raw material prices, business taxation and productivity, will shift the short-run AS curve
4
Q
What does aggregate mean?
A
The total value of output of the economy at a given price level at a given point in time.
5
Q
What is asumed about SRAS?
A
All factors of production are fixed
6
Q
Does a rise in price level leads to a (expansion/contraction) in SRAS?
A
Expansion
7
Q
Does a fall in price level leads to a (expansion/contraction) in SRAS?
A
Contraction
