The United States SRAS curve may shift to the left if we ____________________ Malaysia and the dollar ________________ against the Malaysian ringgit.

Question

Quizplus · Accepted Answer

If the United States buys raw materials from Malaysia and the dollar depreciates against the Malaysian ringgit, it will lead to an increase in the cost of production for US firms. As a result, the short-run aggregate supply (SRAS) curve will shift to the left, indicating a decrease in the quantity of goods and services supplied at a given price level. This is because firms will produce fewer goods and services due to the higher production costs, leading to a decrease in output.

The United States SRAS Curve May Shift to the Left