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Which of the following would shift the SRAS curve to the right (ignoring any potential effect on LRAS)? There is an increase in government spending.

Which of the following would shift the SRAS curve to the right (ignoring any potential effect on LRAS)?

  • There is an increase in government spending.
  • There is a technological improvement that allows firms to reduce their costs of production permanently.
  • The interest rate decreases, spurring investment spending.
  • The government introduces a set of new regulations that make it more costly for firms to produce and sell goods and services. These regulations are expected to be permanent.
  • The world price of oil increases rapidly without warning but is not expected to remain at the new high level permanently. However, in the short run, it is more costly for all firms to produce goods and services.

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