Figure 15-2

-Refer to Figure 15-2.Ceteris paribus,an increase in productivity would be represented by a movement from
A) SRAS₁ to SRAS₂.
B) SRAS₂ to SRAS₁.
C) point A to point B.
D) point B to point A.

Question

Figure 15-2
 
-Refer to Figure 15-2.Ceteris paribus,an increase in productivity would be represented by a movement from
A) SRAS₁ to SRAS₂. 
B) SRAS₂ to SRAS₁. 
C) point A to point B. 
D) point B to point A.

Quizplus · Accepted Answer

An increase in productivity would shift the short-run aggregate supply (SRAS) curve to the right, from SRAS₁ to SRAS₂. This is because higher productivity means that more output can be produced with the same amount of inputs, resulting in lower costs for firms and higher potential profits. As a result, firms will supply more output at each price level, shifting the SRAS curve to the right.

Figure 15-2 -Refer to Figure 15-2.Ceteris Paribus,an Increase in Productivity Would Be