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Ultimate Flashcard Review
Video
Short-Run Aggregate Supply
Key Concepts to Understand
Question 1 of 4
What is the primary reason for the upward slope of the short-run aggregate supply (SRAS) curve?
As the price level rises, consumers have more purchasing power.
In the short run, nominal wages and other input prices are 'sticky' or slow to adjust.
Government regulations increase as the price level rises.
The interest rate effect encourages more investment at higher price levels.
Practice Questions: Test Your Understanding
Apply what you've learned with these practice questions. These questions test your understanding of the key concepts.
Question 1 of 3
Suppose there is a significant increase in the internationally traded price of energy, a major input for production in Country X. How would this likely affect the short-run aggregate supply (SRAS) and the price level in Country X?
SRAS shifts right, Price level decreases
SRAS shifts left, Price level increases
SRAS shifts right, Price level increases
SRAS shifts left, Price level decreases
No change in SRAS, Price level increases
Key Takeaways
- 📊Master the fundamentals: Understanding these core concepts is essential for success in AP Economics.
- ✅Practice makes perfect: Use the interactive exercises and practice questions to reinforce your understanding.