What can cause the short-run aggregate supply curve to shift?

The short-run aggregate supply (SRAS) curve can shift due to changes in production costs and supply chain disruptions. When production costs fluctuate, such as through changes in wages, raw material prices, or energy costs, the ability of firms to produce goods changes, leading to a shift in the SRAS. For instance, if the costs of key inputs rise, producers may reduce output at the existing price level, resulting in a leftward shift of the SRAS curve. Conversely, if production costs decrease, firms can produce more at any given price, shifting the curve to the right.

Supply chain disruptions can further exacerbate this effect. For example, natural disasters, geopolitical tensions, or pandemic-related shutdowns can lead to shortages of necessary inputs, thereby increasing production costs or limiting output capacity. This creates upward pressure on prices and can contribute to inflation, indicating a movement along the SRAS curve depending on the overall aggregate demand.

In contrast to this correct answer, permanent changes in technology and resources influence long-run aggregate supply by altering the economy’s capacity to produce, as they lead to more fundamental changes in productivity rather than short-term fluctuations. Fluctuations in consumer confidence and changes in export demand primarily affect aggregate demand rather than directly shifting the short-run