Question

According to the neoclassical view, an increase in the cpi leads to __________, ceteris paribus

Answer 1

According to the neoclassical view, an increase in the cpi leads to d) No shifting of the SRAS curve ceteris paribus.

SRAS way the long-run production capacity of an economic system. An alternate inside the price degree does no longer affect the SRAS. the quick-run mixture supply curve (SRAS) shall we capture how all of the corporations in an economic system respond to rate stickiness. While prices are sticky, the SRAS curve will slope upward. The SRAS curve suggests that a better rate level leads to more output.

Ultimately, the most essential element shifting the SRAS curve is productiveness increase. Productivity—in economic terms—is how tons of output can be produced with a given amount of labor. One degree of that is output according to employee, or GDP according to capita.

A boom in mixture delivery because of a decrease in entering expenses is represented by means of a shift to the right of the SAS curve. A 2nd issue that causes the mixture delivers curve to shift is monetary growth. Superb financial boom effects from an increase in efficient sources, together with exertions and capital.

The question is incomplete. Please read below to find the missing content.

According to the neoclassical view, an increase in the cpi leads to __________, ceteris paribus.

a) A rightward shift in the SRAS curve

b) A leftward shift in the SRAS curve

c) A  upward shift in the SRAS curve

d) No shifting of the SRAS curve

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