Changes in the following variables will cause a shift of the short-run aggregate

Question

Changes in the following variables will cause a shift of the short-run aggregate supply curve O A. total capital, total labor, and available technology O B. expected inflation, total labor, and price (supply) shocks. Inflation Rate(II) LRAS1 C. short-term capital, short-term labor, and available technology O D. expected inflation, output gap, and price (supply) shocks Refer to the figure on your right. 1.) Use the line drawing tool to show how an increase in the available technology will affect the long-run aggregate supply curve. Draw and label the new graph properly. Carefully follow the instructions above, and only draw the required object. YP Aggregate Output (Y)

Explanation / Answer

Ans

A B is right answer. E. G has gher expected inflation shifts it leftwards as laborers demand more wages, higher labour Leds to rightward shift as more can be supplied at same price and so on.

B simply draw vertical line LRAS² as vertical line towards right of LRAS¹ at any oint on x axis.

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