Change in SRAS

Definition

A change in SRAS refers to a shift or movement of the short-run aggregate supply curve caused by factors such as changes in input prices, technology advancements, government regulations, or expectations about future economic conditions.

Related terms

Cost-push Inflation: Cost-push inflation occurs when rising production costs lead to higher prices throughout the economy due to decreased SRAS.

Input Prices: Input prices refer to the cost of resources used during production, including wages, raw materials, energy costs, etc., which can influence SRAS movements.

Business Taxes and Regulations: Changes in business taxes or regulations imposed by governments can impact firms' costs of production and ultimately affect SRAS levels.