Use Figure: AD–AS Model. If commodity prices rise, the _____ curve will shift to the _____.Choose one answer from the options below.SRAS; leftSRAS; rightAD; leftAD; right
Question
Use Figure: AD–AS Model. If commodity prices rise, the _____ curve will shift to the _____.Choose one answer from the options below.SRAS; leftSRAS; rightAD; leftAD; right
Solution
If commodity prices rise, it will increase the cost of production for businesses. This will cause a decrease in the supply of goods and services in the short run. In the context of the Aggregate Demand-Aggregate Supply (AD-AS) model, this is represented by a shift of the Short Run Aggregate Supply (SRAS) curve to the left. So, the correct answer is "SRAS; left".
Similar Questions
A decrease in the real money supply caused by an increase in the price level is graphically represented by (A) A movement along the AD curve to the right. (B) A shift of the AD curve to the left. (C) A movement along the AD curve to the left. (D) An increase in the slope of the AD curve. (E) A shift of the AD curve to the right.
The AD curve will shift to the right:Choose one answer from the options below.because of the wealth and interest rate effects.if household wealth increases.if the aggregate price level increases.if the government increases taxes paid by households.BackNext
The effect on the aggregate demand of a decrease in the price level is represented by a/an _______________ the AD curve. upward movement along downward movement along upward shift of leftward shift of None of the above are correct
A movement along the AD curve is due to:Multiple choice question.a change in aggregate supply.changes in the determinants of aggregate demand.a change in determinants of demand.changes in the price level.
Interest rates rise.Instructions: Grab either the AD or AS curve and drag and drop it to a new position to represent the resulting shift in AD or AS.
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.