Explain how each of the following events would affect the short-run aggregate supply curve
a. A decrease in the price level
b. A decrease in what the price level is expected to be in the future
c. A price level that is currently lower than expected
d. An unexpected decrease in the price of an important raw material
e. A decrease in the labor force
a. A lower price level would cause a movement down along the short-run aggregate supply curve.
b. A decrease in what the price level is expected to be in the future would cause the short-run aggregate supply curve to shift to the right.
c. A price level currently lower than expected would lead firms to decrease prices, causing the short-run aggregate supply curve to shift to the right.
d. An unexpected decrease in the price of an important raw material would cause the short-run aggregate supply curve to shift to the right.
e. A decrease in the labor force would cause the short-run aggregate supply curve to shift to the left.
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a. temporary surcharges rather than permanent surcharges. b. permanent surcharges rather than temporary surcharges. c. temporary tax cuts rather than a permanent tax cuts. d. permanent tax cuts rather than a temporary tax cuts.
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