Determinants of AS
Short-run AS shifts result from input cost changes (wages, raw material prices, energy), exchange rates, and tax rates. Long-run AS shifts result from productive capacity changes (capital, labour, technology).
Real World
When global oil prices spiked after Russia's 2022 invasion of Ukraine, energy costs surged for European manufacturers, shifting SRAS leftward and contributing to stagflation across the eurozone.
Exam Focus
Separate SRAS shift factors (input costs, energy) from LRAS shift factors (technology, labour force) — mixing them loses evaluation marks.
How well did you know this?