Sia
Question
Statistics
Posted 10 months ago
Which of the following best describes something that would cause an increase in output along a short-run aggregate supply (SRAS) curve?
Choose 1 answer:
(A) An increase in the price of a single good
(B) An increase in the consumer price index (CPI)
(C) Firms spend less on capital equipment
(D) An increase in business taxes
(E) A decrease in the wage rate
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Answer from Sia
Posted 10 months ago
Solution by Steps
step 1
Identify the factor that would cause a movement along the SRAS curve, not a shift of the curve
step 2
Recognize that an increase in output along the SRAS curve is typically caused by a change in the price level of goods and services, not by changes in production costs or overall economic conditions
step 3
Evaluate the answer choices to determine which one reflects a change in the price level of goods and services that would result in an increase in output along the SRAS curve
step 4
Understand that a decrease in the wage rate (E) would lower production costs, allowing firms to supply more at the same price levels, thus increasing output along the SRAS curve
Answer
E
Key Concept
Movement along the SRAS curve
Explanation
A decrease in the wage rate reduces production costs, leading to an increase in output along the SRAS curve without shifting the curve itself.
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