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What factors cause temporary left shifts in the SRAs curve?

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Final answer:

Key factors causing leftward shifts in the SRAS curve include higher input costs such as energy prices, labor costs, and the prices of imported goods, along with supply shocks like natural disasters.

Step-by-step explanation:

The factors that cause temporary left shifts in the Short-Run Aggregate Supply (SRAS) curve include an increase in energy prices, a rise in the cost of labor, or wages, and an increase in the cost of imported goods used as inputs in production. These are among the key factors because they directly affect the costs of production for many or most firms across the economy. When these input costs go up, the SRAS curve shifts to the left, indicating that at every price level, a smaller quantity of output will be produced. Additionally, other supply shocks, such as an unexpected natural disaster that destroys input goods, can also cause the SRAS curve to shift left. These supply shocks and price increases in production inputs contribute to inflationary pressures by increasing the overall price level.

User Anthony Atkinson
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