Figure 24-2

-Refer to Figure 24-2.Ceteris paribus,a decrease 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 24-2
 
-Refer to Figure 24-2.Ceteris paribus,a decrease 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

A decrease in productivity would lead to a decrease in short-run aggregate supply (SRAS), causing a leftward shift of the SRAS curve. This would be represented by a movement from SRAS₂ to SRAS₁, as shown in the diagram. Points A and B represent different levels of output and price level resulting from the shifts in the SRAS curve.

Figure 24-2 -Refer to Figure 24-2.Ceteris Paribus,a Decrease in Productivity Would Be