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Which of the following would affect short-run aggregate supply (SRAS) but not long-run aggregate supply (LRAS)?

a. a change in technology
b. a change in resource prices
c. a change in the amount of resources
d. a change in institutions
e. a change in the working-age population

User UnR
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1 Answer

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Final answer:

A change in resource prices affects only the short-run aggregate supply (SRAS), causing it to shift, but does not impact the long-run aggregate supply (LRAS) since LRAS is determined by factors such as technology and the amount of resources.

Step-by-step explanation:

The factor that would affect short-run aggregate supply (SRAS) but not long-run aggregate supply (LRAS) is a change in resource prices. In the short run, changes in the cost of inputs, such as labor or energy prices, can cause the SRAS to shift. This is because SRAS is sensitive to the cost of production and prices of inputs. For example, if wages or the cost of imported goods rise, SRAS will shift to the left, indicating a reduced quantity of goods supplied at any given price level.

However, in the long run, the LRAS is considered to be unaffected by changes in resource prices. This is due to the fact that the LRAS reflects the potential output of an economy if all resources are fully employed, which is based on factors such as technology, institutions, and the amount of resources, rather than the prices of inputs. Therefore, while a change in resource prices like energy or labor can temporarily alter the amount of goods and services an economy can supply in the short term, it does not impact the economy's capacity to produce in the long term, assuming all resources are fully utilized.

User Gkond
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