Question

Suppose Americans buy inputs from foreigners. When the price of foreign inputs falls, the U.S. SRAS curve __________, which tends to __________the U.S. price level. a. remains constant; increase b. shifts rightward; reduce c. shifts leftward; increase d. shifts leftward; reduce

Answer 1

When the price of foreign inputs falls, the U.S. SRAS curve option (b)i.e, shifts rightward; which tends to reduce the U.S. price level.

What is the SRAS curve?

We can understand how each firm in an economy reacts to price stickiness using the short-run aggregate supply curve (SRAS). The SRAS curve will have an upward slope when prices are stable. According to the SRAS curve, more output results from higher price levels.

The cost of labor, or wages, and the price of imported commodities that we use as inputs for other products are two other significant variables that may cause the SRAS curve to change in addition to energy prices.

A higher level of productivity causes the SRAS curve to move to the right because businesses can produce more output at all price points.

To know more about SRAS curve refer to:  brainly.com/question/16909327

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