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SRAS slopes upward because a higher price level raises profit margins while many input costs remain sticky."},{"text":"SRAS is vertical.","correct":false,"explanation":"A vertical supply curve is associated with the long-run economy at full productive capacity. SRAS slopes upward because short-run costs adjust slowly."},{"text":"SRAS is horizontal.","correct":false,"explanation":"A horizontal curve would imply unlimited output at one price level. SRAS slopes upward because expanding output becomes attractive as prices rise relative to sticky costs."}]},{"id":"be4ef281-64ab-4e06-81a8-9fc8a51d7443","cardType":"basic","points":1,"front":"Why do firms' costs lag behind changes in the price level in the short run?","back":"Money wages and other input prices are sticky in the short run.","mcqOptions":[{"text":"Money wages and other input prices are sticky in the short run.","correct":true,"explanation":"Wage contracts, supplier agreements and delayed price reviews prevent many input costs from adjusting immediately when the general price level changes."},{"text":"Money wages and other input prices are flexible in the short run.","correct":false,"explanation":"Fully flexible costs would adjust quickly rather than lag behind output prices. Money wages and other input prices are sticky because contracts and adjustment delays slow changes."},{"text":"Money wages and other input prices are falling in the short run.","correct":false,"explanation":"Costs do not have to fall for them to lag behind the price level. The key is that money wages and input prices are sticky and adjust slowly."},{"text":"Money wages and other input prices are irrelevant in the short run.","correct":false,"explanation":"Input prices directly affect production costs and profit margins. They lag because wages and other input prices are sticky, not because firms can disregard them."}]},{"id":"05fa1f08-a42e-47d0-80af-17e06da18226","cardType":"basic","points":1,"front":"What happens to firms' profit margins when the price level rises, assuming costs are fixed?","back":"A higher price level raises firms' profit margins.","mcqOptions":[{"text":"A higher price level raises firms' profit margins.","correct":true,"explanation":"When selling prices rise while input costs remain fixed, the difference between revenue per unit and cost per unit increases, widening firms' profit margins."},{"text":"A higher price level lowers firms' profit margins.","correct":false,"explanation":"This reverses the relationship between prices and margins. With costs fixed, higher selling prices increase revenue per unit and therefore raise firms' profit margins."},{"text":"A higher price level fixes firms' profit margins.","correct":false,"explanation":"Profit margins would remain fixed only if costs rose proportionately with selling prices. When costs are fixed, a higher price level raises firms' profit margins."},{"text":"A higher price level removes firms' profit margins.","correct":false,"explanation":"Higher selling prices do not eliminate the gap between revenue and fixed costs. They widen that gap, so firms' profit margins rise rather than disappear."}]},{"id":"667e87db-99dd-4d90-a33a-f828fb36dba4","cardType":"basic","points":2,"front":"Why does a higher price level increase real output along SRAS?","back":"Higher profit margins encourage firms to expand output.","mcqOptions":[{"text":"Higher profit margins encourage firms to expand output.","correct":true,"explanation":"Larger margins make additional production more profitable, giving firms an incentive to employ more variable inputs and increase the quantity of real output supplied."},{"text":"Higher profit margins encourage firms to reduce output.","correct":false,"explanation":"This reverses firms' usual profit incentive. Higher margins make each additional unit more rewarding to produce, so firms expand rather than reduce output."},{"text":"Higher profit margins encourage firms to raise wages.","correct":false,"explanation":"Firms might eventually change wages, but this does not explain movement along SRAS. Higher profit margins initially encourage firms to expand real output."},{"text":"Higher profit margins encourage firms to cut prices.","correct":false,"explanation":"Cutting prices would reduce the margin that motivates additional production. Along SRAS, a higher price level widens margins and encourages firms to expand output."}]},{"id":"17b87f2f-a253-4b47-9b84-3aafb65ef992","cardType":"basic","points":1,"front":"What does a change in production costs do to SRAS?","back":"A change in firms' costs shifts the whole SRAS curve.","mcqOptions":[{"text":"A change in firms' costs shifts the whole SRAS curve.","correct":true,"explanation":"Production costs affect how much firms are willing to supply at every price level, so a cost change shifts the entire short-run aggregate supply curve."},{"text":"A change in firms' costs causes a movement along SRAS.","correct":false,"explanation":"A movement along SRAS results from a change in the price level. A change in production costs alters supply at every price level and shifts the whole curve."},{"text":"A change in firms' costs shifts the whole AD curve.","correct":false,"explanation":"Production costs directly alter firms' aggregate supply rather than planned economy-wide expenditure. They therefore shift the whole SRAS curve, not the aggregate demand curve."},{"text":"A change in firms' costs rotates the whole SRAS curve.","correct":false,"explanation":"The standard model represents a broad cost change as shifting supply at each price level. It shifts the whole SRAS curve rather than merely rotating it."}]},{"id":"811cb0cf-61f8-415d-82bc-1cf28b0ab929","cardType":"basic","points":3,"front":"Name three changes that can alter firms' production costs and shift SRAS.","back":"

Money wage rates
Raw material prices
Energy prices

","mcqOptions":[{"text":"

Money wage rates
Raw material prices
Energy prices

","correct":true,"explanation":"Wages, raw materials and energy are major inputs into production. Changes in their prices alter firms' unit costs and therefore shift short-run aggregate supply."},{"text":"

Income tax rates
Consumer confidence
Household saving

","correct":false,"explanation":"These primarily influence household disposable income and aggregate demand, rather than firms' direct production costs. Money wages, raw materials and energy prices are relevant cost determinants."},{"text":"

Export demand
Government spending
Interest rates

","correct":false,"explanation":"These are mainly determinants of aggregate demand, although interest rates can affect financing. Money wage rates, raw material prices and energy prices directly alter production costs."},{"text":"

Population growth
Consumer borrowing
Import demand

","correct":false,"explanation":"These do not form the three direct input-price changes requested. Money wage rates, raw material prices and energy prices directly change firms' costs and SRAS."}]},{"id":"de475ba6-e9a3-44b8-8746-4175ea4377a4","cardType":"basic","points":2,"front":"How does a fall in the pound affect firms using imported inputs?","back":"A fall in the pound raises the cost of imported inputs.","mcqOptions":[{"text":"A fall in the pound raises the cost of imported inputs.","correct":true,"explanation":"A depreciation means more pounds are required to buy a given amount of foreign currency, making imported raw materials and components more expensive for UK firms."},{"text":"A fall in the pound lowers the cost of imported inputs.","correct":false,"explanation":"This reverses the exchange-rate effect. A weaker pound purchases less foreign currency, so UK firms must pay more pounds for imported inputs."},{"text":"A fall in the pound fixes the cost of imported inputs.","correct":false,"explanation":"Import prices in pounds do not generally remain fixed after depreciation. A fall in sterling raises the pound-denominated cost of foreign inputs."},{"text":"A fall in the pound removes the cost of imported inputs.","correct":false,"explanation":"Depreciation does not make foreign inputs free or eliminate their cost. It raises their sterling price because each pound buys less foreign currency."}]},{"id":"1e68d5fa-7eaf-47fe-bd31-8054d2602481","cardType":"basic","points":1,"front":"What happens to SRAS after a fall in the pound?","back":"A fall in the pound shifts SRAS left.","mcqOptions":[{"text":"A fall in the pound shifts SRAS left.","correct":true,"explanation":"Sterling depreciation makes imported inputs more expensive, raising firms' production costs and reducing the real output supplied at each price level."},{"text":"A fall in the pound shifts SRAS right.","correct":false,"explanation":"This treats cheaper UK exports as a supply-side cost reduction. Depreciation raises imported input costs, so SRAS shifts left rather than right."},{"text":"A fall in the pound shifts AD left.","correct":false,"explanation":"A weaker pound can affect net exports, but the specified imported-input channel concerns production costs. Higher input costs shift SRAS left, not AD left."},{"text":"A fall in the pound leaves SRAS unchanged.","correct":false,"explanation":"This overlooks firms' reliance on imported materials, fuel and components. Depreciation raises these costs and shifts SRAS left."}]},{"id":"497547e9-7126-4f3d-a42d-0b11661cbc0e","cardType":"basic","points":2,"front":"Why does higher productivity shift SRAS?","back":"Higher productivity lowers unit costs.","mcqOptions":[{"text":"Higher productivity lowers unit costs.","correct":true,"explanation":"Greater productivity means each worker or input produces more output. Firms therefore use fewer inputs per unit of output, reducing average production costs."},{"text":"Higher productivity raises unit costs.","correct":false,"explanation":"This reverses the efficiency effect. Producing more output from the same quantity of inputs spreads input costs across more units, lowering unit costs."},{"text":"Higher productivity fixes unit costs.","correct":false,"explanation":"Unit costs do not remain unchanged when output per input increases. Higher productivity allows each unit to be produced with fewer resources, lowering unit costs."},{"text":"Higher productivity removes fixed costs.","correct":false,"explanation":"Productivity improvements do not eliminate expenses such as rent or machinery. They lower unit costs by increasing the output produced from available inputs."}]},{"id":"3fb0373d-b002-425a-bc47-f22c61d0a313","cardType":"basic","points":1,"front":"Which direction does SRAS shift when productivity rises?","back":"Higher productivity shifts SRAS right.","mcqOptions":[{"text":"Higher productivity shifts SRAS right.","correct":true,"explanation":"Higher productivity reduces unit costs, enabling firms to profitably supply more real output at every price level and shifting SRAS to the right."},{"text":"Higher productivity shifts SRAS left.","correct":false,"explanation":"This reverses the supply effect of greater efficiency. Higher productivity lowers unit costs, so firms supply more at each price level and SRAS shifts right."},{"text":"Higher productivity shifts AD right.","correct":false,"explanation":"Productivity primarily changes production efficiency and costs, not planned expenditure. Its direct short-run effect is to shift SRAS right rather than AD right."},{"text":"Higher productivity leaves SRAS unchanged.","correct":false,"explanation":"This overlooks productivity's effect on unit costs. Greater output per input lowers firms' costs and shifts the short-run aggregate supply curve right."}]},{"id":"23b206c2-351b-429e-92c1-d60e64a06a00","cardType":"basic","points":1,"front":"What type of inflation can result from a leftward shift of SRAS?","back":"A leftward SRAS shift causes cost-push inflation.","mcqOptions":[{"text":"A leftward SRAS shift causes cost-push inflation.","correct":true,"explanation":"A rise in production costs reduces aggregate supply at each price level. The resulting higher equilibrium price level is classified as cost-push inflation."},{"text":"A leftward SRAS shift causes demand-pull inflation.","correct":false,"explanation":"Demand-pull inflation results from rising aggregate demand. A leftward SRAS shift reflects higher production costs, so the resulting price rise is cost-push inflation."},{"text":"A leftward SRAS shift causes asset-price inflation.","correct":false,"explanation":"Asset-price inflation concerns rising prices of assets such as houses or shares. A contraction of SRAS raises the general price level through cost-push inflation."},{"text":"A leftward SRAS shift causes imported deflation.","correct":false,"explanation":"A leftward supply shift raises rather than lowers the equilibrium price level. Because it originates from increased production costs, it causes cost-push inflation."}]},{"id":"0589a4a3-b103-40d1-92af-073772053f16","cardType":"basic","points":3,"front":"What happens to the price level and real output after SRAS shifts left?","back":"

Price level rises
Real output falls

","mcqOptions":[{"text":"

Price level rises
Real output falls

","correct":true,"explanation":"With aggregate demand unchanged, lower short-run aggregate supply creates scarcity and higher costs, raising the equilibrium price level while reducing equilibrium real output."},{"text":"

Price level falls
Real output rises

","correct":false,"explanation":"These are the effects of a rightward, not leftward, SRAS shift. Reduced short-run supply raises the price level and lowers real output."},{"text":"

Price level rises
Real output rises

","correct":false,"explanation":"The price effect is correct, but output moves in the opposite direction. A leftward SRAS shift raises the price level and reduces real output."},{"text":"

Price level falls
Real output falls

","correct":false,"explanation":"The output effect is correct, but reduced aggregate supply puts upward pressure on prices. A leftward SRAS shift raises the price level while real output falls."}]},{"id":"61c82ff4-9b6e-43d0-9764-67e308063ed8","cardType":"basic","points":3,"front":"What happens to the price level and real output after SRAS shifts right?","back":"

Price level falls
Real output rises

","mcqOptions":[{"text":"

Price level falls
Real output rises

","correct":true,"explanation":"With aggregate demand unchanged, an increase in short-run aggregate supply reduces cost pressure and permits a lower equilibrium price level alongside greater real output."},{"text":"

Price level rises
Real output falls

","correct":false,"explanation":"These are the effects of a leftward, not rightward, SRAS shift. Greater short-run supply lowers the price level and raises real output."},{"text":"

Price level rises
Real output rises

","correct":false,"explanation":"The output effect is correct, but greater supply reduces price pressure. A rightward SRAS shift raises real output while lowering the price level."},{"text":"

Price level falls
Real output falls

","correct":false,"explanation":"The price effect is correct, but firms supply more rather than less output. A rightward SRAS shift lowers the price level and raises real output."}]},{"id":"7bead784-7bb7-4aaf-96c6-723f1c680a1c","cardType":"basic","points":2,"front":"How does a rise in oil prices affect SRAS?","back":"A rise in oil prices shifts SRAS left.","mcqOptions":[{"text":"A rise in oil prices shifts SRAS left.","correct":true,"explanation":"Oil is a major energy and transport input. Higher oil prices increase production costs across the economy, reducing supply at each price level."},{"text":"A rise in oil prices shifts SRAS right.","correct":false,"explanation":"This reverses the effect of higher energy costs. More expensive oil raises production and transport costs, reducing aggregate supply and shifting SRAS left."},{"text":"A rise in oil prices shifts AD right.","correct":false,"explanation":"The direct effect considered is on firms' input costs, not economy-wide planned expenditure. Higher oil costs shift SRAS left rather than AD right."},{"text":"A rise in oil prices leaves SRAS unchanged.","correct":false,"explanation":"This ignores oil's widespread use in energy, production and transport. A price rise increases firms' costs and shifts SRAS left."}]},{"id":"96a9787a-d5d5-431c-a975-c1f27a354663","cardType":"basic","points":1,"front":"What costs increased for UK firms during the 2022 global energy price surge?","back":"In 2022, global gas and oil price rises increased UK firms' energy and transport costs.","mcqOptions":[{"text":"In 2022, global gas and oil price rises increased UK firms' energy and transport costs.","correct":true,"explanation":"Gas directly raised heating and electricity expenses, while higher oil prices increased fuel and distribution expenses, raising both energy and transport costs for UK firms."},{"text":"In 2022, global gas and oil price rises increased UK firms' exports and profit margins.","correct":false,"explanation":"Higher fuel prices were a cost shock, not a direct increase in exports or margins. They raised firms' energy and transport costs and squeezed profitability."},{"text":"In 2022, global gas and oil price rises increased UK firms' productivity and capital stock.","correct":false,"explanation":"More expensive energy does not automatically improve efficiency or productive capacity. The immediate effect was higher energy and transport costs for UK firms."},{"text":"In 2022, global gas and oil price rises increased UK firms' sales and market shares.","correct":false,"explanation":"The surge did not directly guarantee stronger demand or competitive positions. It increased firms' energy and transport costs by making power and fuel more expensive."}]},{"id":"9737d36a-baad-4215-b1b6-e01f68d72a3d","cardType":"basic","points":2,"front":"What was the macroeconomic result of the UK's 2022 energy price surge?","back":"The 2022 energy shock caused cost-push inflation and weak output growth.","mcqOptions":[{"text":"The 2022 energy shock caused cost-push inflation and weak output growth.","correct":true,"explanation":"Higher energy and transport costs shifted SRAS left, raising the general price level while constraining production and therefore weakening growth in real output."},{"text":"The 2022 energy shock caused demand-pull inflation and strong output growth.","correct":false,"explanation":"This treats the shock as an expansion of aggregate demand. It raised firms' production costs, causing cost-push inflation and weak rather than strong output growth."},{"text":"The 2022 energy shock caused cost-push deflation and strong output growth.","correct":false,"explanation":"Higher energy costs raise the price level rather than produce deflation, while reduced SRAS constrains output. The result was cost-push inflation and weak output growth."},{"text":"The 2022 energy shock caused demand-side deflation and weak output growth.","correct":false,"explanation":"Although output growth was weak, the principal price effect came from higher production costs, not falling demand. The shock caused cost-push inflation rather than deflation."}]},{"id":"5d7b35a2-2d8d-46f3-89b1-3211d5658981","cardType":"basic","points":1,"front":"What happens on the SRAS diagram when only the price level changes?","back":"A change in the price level causes a movement along SRAS.","mcqOptions":[{"text":"A change in the price level causes a movement along SRAS.","correct":true,"explanation":"The price level is measured on the vertical axis, so a change in it changes the quantity of real output supplied at different points on the existing SRAS curve."},{"text":"A change in the price level causes a shift in SRAS.","correct":false,"explanation":"This confuses a change in the price level with a change in a non-price determinant of supply. The price level causes movement along SRAS; cost or productivity changes shift the curve."},{"text":"A change in the price level causes a movement along AD.","correct":false,"explanation":"Aggregate demand also responds to price-level changes, but the question concerns firms' short-run aggregate supply. On the SRAS diagram, a price-level change produces movement along SRAS."},{"text":"A change in the price level causes a shift in AD.","correct":false,"explanation":"A price-level change does not shift aggregate demand; it causes movement along both existing AD and SRAS curves. For SRAS specifically, the result is movement along the curve."}]},{"id":"abc63091-3fd1-49e7-99d3-d271c45b076b","cardType":"basic","points":1,"front":"What happens on the SRAS diagram when firms' production costs change?","back":"A cost shock causes a shift in SRAS.","mcqOptions":[{"text":"A cost shock causes a shift in SRAS.","correct":true,"explanation":"Production costs are a non-price determinant of short-run aggregate supply. A cost shock changes the quantity firms will supply at every price level, shifting the whole SRAS curve."},{"text":"A cost shock causes a movement along SRAS.","correct":false,"explanation":"Movement along SRAS occurs only when the price level changes. A cost shock changes firms' costs at all price levels, so it shifts SRAS instead."},{"text":"A cost shock causes a shift in AD.","correct":false,"explanation":"This treats a supply-side change as a demand-side change. Higher or lower production costs alter firms' willingness to supply, causing a shift in SRAS rather than AD."},{"text":"A cost shock causes a movement along AD.","correct":false,"explanation":"A cost shock is not a change in the price level and does not describe movement along aggregate demand. It changes production costs, so the SRAS curve shifts."}]},{"id":"eb34d22b-02ba-457d-b00e-d1e11dc6091d","cardType":"basic","points":3,"front":"How should SRAS shifts be distinguished from LRAS shifts?","back":"Changes in day-to-day production costs shift SRAS, whereas changes in productive capacity shift LRAS.","mcqOptions":[{"text":"Changes in day-to-day production costs shift SRAS, whereas changes in productive capacity shift LRAS.","correct":true,"explanation":"Short-run supply is affected by costs such as wages, energy and raw materials. Long-run aggregate supply depends on the economy's productive capacity, including resources, capital and technology."},{"text":"Changes in day-to-day production costs shift LRAS, whereas changes in productive capacity shift SRAS.","correct":false,"explanation":"This reverses the distinction between the curves. Day-to-day cost changes affect short-run supply and shift SRAS, while productive capacity determines the position of LRAS."},{"text":"Changes in day-to-day production costs shift AD, whereas changes in productive capacity shift SRAS.","correct":false,"explanation":"Production costs affect supply rather than aggregate demand, and productive capacity is a long-run concept. Costs shift SRAS, whereas changes in productive capacity shift LRAS."},{"text":"Changes in day-to-day production costs shift SRAS, whereas changes in productive capacity shift AD.","correct":false,"explanation":"Productive capacity determines how much the economy can produce sustainably, which is represented by LRAS. It does not directly shift AD; day-to-day costs shift SRAS."}]},{"id":"bd13d872-68ab-4e63-a81e-7e12c436d229","cardType":"cloze","points":null,"front":"SRAS slopes upward because money wages and other input prices are assumed [ ] in the short run.","back":"SRAS slopes upward because money wages and other input prices are assumed fixed in the short run.","mcqOptions":[{"text":"fixed","correct":true,"explanation":"In the short run, money wages and other input prices are assumed fixed or sticky. A higher price level therefore raises revenue relative to costs and encourages firms to supply more output."},{"text":"flexible","correct":false,"explanation":"Assuming input prices are flexible would remove the key short-run cost rigidity. The upward-sloping SRAS explanation assumes money wages and other input prices are fixed in the short run."},{"text":"falling","correct":false,"explanation":"The relevant assumption is not that input prices fall, but that they do not adjust immediately. They are assumed fixed in the short run as the price level changes."},{"text":"rising","correct":false,"explanation":"Input prices rising would increase firms' costs and is not the assumption used to explain upward-sloping SRAS. Money wages and other input prices are assumed fixed in the short run."}]},{"id":"470fafb2-7e75-4318-8100-c89ea97dd84a","cardType":"cloze","points":null,"front":"A rise in the price level increases firms' [ ] when short-run costs are sticky.","back":"A rise in the price level increases firms' profit margins when short-run costs are sticky.","mcqOptions":[{"text":"profit margins","correct":true,"explanation":"With sticky short-run costs, a higher price level increases the revenue received per unit without an immediate equivalent rise in input costs. Firms' profit margins therefore increase."},{"text":"unit costs","correct":false,"explanation":"This mistakes firms' selling prices for their production costs. When short-run costs are sticky, unit costs do not rise immediately; higher prices increase profit margins instead."},{"text":"wage costs","correct":false,"explanation":"Money wages are assumed sticky in the short run, so they do not automatically rise with the price level. The immediate effect is higher profit margins for firms."},{"text":"fixed costs","correct":false,"explanation":"Fixed costs do not increase simply because the price level rises. Given sticky short-run costs, firms receive higher revenue per unit and their profit margins rise."}]},{"id":"1c46f37d-eaa3-45c6-bfa5-0ba5d55a5fc3","cardType":"cloze","points":null,"front":"A rise in raw material or energy prices shifts SRAS to the [ ].","back":"A rise in raw material or energy prices shifts SRAS to the left.","mcqOptions":[{"text":"left","correct":true,"explanation":"Higher raw material or energy prices raise firms' production costs. Firms will supply less output at each price level, so the SRAS curve shifts to the left."},{"text":"right","correct":false,"explanation":"This reverses the supply effect of a cost increase. Dearer energy or raw materials reduce profitability at each price level, causing SRAS to shift left rather than right."},{"text":"upward","correct":false,"explanation":"The standard aggregate supply diagram describes this change as a horizontal leftward shift, not an upward movement. Higher input costs reduce supply at every price level, shifting SRAS left."},{"text":"downward","correct":false,"explanation":"A fall in production costs could be described as a downward or rightward supply shift in some diagrams. Rising input costs instead reduce supply, so SRAS shifts left."}]},{"id":"e533ba43-e6a6-40bc-81f8-eba3a087dd8d","cardType":"cloze","points":null,"front":"A rise in productivity shifts SRAS to the [ ].","back":"A rise in productivity shifts SRAS to the right.","mcqOptions":[{"text":"right","correct":true,"explanation":"Higher productivity means firms can produce more output from given inputs or at lower unit cost. They therefore supply more at every price level, shifting SRAS to the right."},{"text":"left","correct":false,"explanation":"This reverses the effect of productivity. A productivity rise lowers unit costs or increases output per input, so firms supply more and SRAS shifts right."},{"text":"upward","correct":false,"explanation":"Productivity changes are conventionally shown as shifts of the SRAS curve, with higher productivity shifting it right. An upward movement would imply reduced supply at each price level."},{"text":"downward","correct":false,"explanation":"Although lower costs may make a supply curve appear lower on some axes, the aggregate supply convention is a rightward shift. Higher productivity increases supply at every price level."}]},{"id":"321279d8-e6cd-458b-8a7f-459d4ae979a2","cardType":"cloze","points":null,"front":"A price-level change causes movement along SRAS, while a cost change causes the curve to [ ].","back":"A price-level change causes movement along SRAS, while a cost change causes the curve to shift.","mcqOptions":[{"text":"shift","correct":true,"explanation":"A cost change affects firms' production costs at every price level, changing the whole short-run aggregate supply relationship. It therefore causes SRAS to shift rather than movement along it."},{"text":"move","correct":false,"explanation":"This applies the price-level rule to a non-price determinant. Only a change in the price level causes movement along SRAS; a change in costs shifts the curve."},{"text":"contract","correct":false,"explanation":"A cost rise can cause a contraction in real output at the new equilibrium, but the curve itself shifts. The general effect of any cost change is for SRAS to shift."},{"text":"expand","correct":false,"explanation":"An expansion of output may follow a favourable cost change, but it is not the diagrammatic description of the curve's response. A cost change causes SRAS itself to shift."}]},{"id":"96421d37-5746-4c82-bb3b-b62fb4e44354","cardType":"cloze","points":null,"front":"A leftward SRAS shift raises the price level and lowers [ ].","back":"A leftward SRAS shift raises the price level and lowers real output.","mcqOptions":[{"text":"real output","correct":true,"explanation":"A leftward SRAS shift raises firms' costs and reduces the output supplied at each price level. The new short-run equilibrium has a higher price level and lower real output."},{"text":"unemployment","correct":false,"explanation":"Lower real output may lead to higher unemployment, but unemployment is expected to rise rather than fall after a leftward SRAS shift. The directly reduced equilibrium variable is real output."},{"text":"the price level","correct":false,"explanation":"This reverses the inflationary consequence of an adverse supply shock. A leftward SRAS shift reduces real output but raises the price level because production has become more costly."},{"text":"aggregate demand","correct":false,"explanation":"A leftward SRAS shift is a supply-side change and does not itself lower the AD curve. The equilibrium moves to a higher price level and lower real output."}]}]}],"examCountdown":{"examDate":"2027-05-10","paperLabel":"Paper 1"},"heading":"2.2.5 Determinants of short-run aggregate supply","title":"2.2.5 Determinants of short-run aggregate supply Flashcards","topbar":{"backHref":"/a-level/economics/aqa/flashcards"},"topicSidebar":"$L38"}]}],"topicId":"e8962529-907e-598b-999c-777ef35eb0eb","walled":"$L39"}],"$L3a","$L3b"]