A decrease in the price of a nonlabor input such as machinery
A) shifts the SRAS curve to the right.
B) shifts the SRAS curve to the left.
C) causes an upward movement along the existing SRAS curve.
D) causes a downward movement along the existing SRAS curve.
E) none of the above

Question

Quizplus · Accepted Answer

A decrease in the price of a nonlabor input such as machinery reduces the cost of production, which enables firms to produce more output at each price level. This results in a rightward shift of the short-run aggregate supply (SRAS) curve.

A Decrease in the Price of a Nonlabor Input Such