Unit 3.2 · Variations in Economic Activity: Aggregate Demand and Aggregate Supply
Determinants and Shifts of SRAS
AO2AO4Diagram required
Syllabus Requirement
Shifts in SRAS are caused by changes in costs of production, such as wages, taxes, and import prices.
Assessment Objectives
AO2Application and Analysis
AO4Use of Appropriate Skills
Summary
The short run aggregate supply (SRAS) curve represents the total output that firms in an economy are willing to supply at various price levels, assuming that productivity and input costs remain constant. Understanding the determinants of SRAS is important for analyzing how changes in production costs can affect overall economic output in the short run.