Question:

Economic-A decrease in the price of electricity will cause??thank you?

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A decrease in the price of electricity will cause

a movement down the SRAS curve.

a movement up the SRAS curve.

a leftward shift in the SRAS curve.

a rightward shift in the SRAS curve.

no change regarding the SRAS curve.

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3 ANSWERS


  1. d) a rightward shift in the SRAS curve.

    I think Keynes is off with the perfectly elastic SRAS.


  2. d) a rightward shift in the SRAS curve.

    Though for old Classical model - (there SRAS is horizontal) "a movement down the SRAS curve." would be right, but stick on "d".

  3. Changes in price bring about changes in quantities supplied or demanded so I'd have to say a) because lower prices mean lower quantity supplied.

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