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Theme 2: The UK economy: performance and policies
Aggregate supply
Short run aggregate supply
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Created by
Lucas B
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Cards (4)
How does a change in the cost of raw materials affect short run AS?
If the costs of
production
rise, AS will
decrease
How does a change in exchange rates affect short run AS?
If the exchange rate of the pound increases against other currencies than
imports
become cheaper and AS will
increase
How does a change in tax rates affect short run AS?
If there is a decrease in employers tax contributions, AS will increase
How does a change in level of tariffs affect short run AS?
If a country increases tariffs on its
imports
than the costs for
firms
increases, meaning AS will
decrease