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Figure: Determining SRAS Shifts
-(Figure: Determining SRAS Shifts) If there is a decrease in input prices,the short-run aggregate supply curve will shift from SRAS₀ to _____ and the price level will become _____.

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Figure: Determining SRAS Shifts

-(Figure: Determining SRAS Shifts) If there is a decrease in input prices,the short-run aggregate supply curve will shift from SRAS₀ to _____ and the price level will become _____.

Quizplus · Accepted Answer

A decrease in input prices will reduce the cost of production, leading to an increase in the quantity supplied at each price level. This will shift the SRAS curve to the right, from SRAS0 to SRAS1. As a result, the price level will fall from P0 to P1.

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