Shifts in AS

Question 1

Shifts in SRAS

Answer 1

Changes in costs of production
-Increase in commodity prices e.g. oil, shifts SRAS left - vice-versa (increasing costs)

Question 2

Shifts LRAS

Answer 2

Changes in productivity or quantity of factors of production
-Increase in investment, shifts LRAS right (increasing productivity)
-Discovery of natural resources, shifts LRAS to right - vice-versa (increasing quantity)