The only thing that can shift SRAS but not LRAS is a. a change in the...
The only thing that can shift SRAS but not LRAS is
a. a change in the labor force
b. a change in expected inflation
c. a change in technology
d. a change in capital
Homework Answers
In short run all factors lead to a shift and capital is fixed in short run because it is assumed that we can't build new plants in the short run. SRAS faces a trade-off between expected inflation and unemployment. As inflation brings higher prices, the SRAS shifts rightward as more is supplied and therefore higher amount of labor is employed and unemployment reduces.
However in case of LRAS, the actual inflation and expected inflation are equal so there is no tradeoff and therefore the longrun output is independent of the level of inflation at the full employment level. So there is no shift in LRAS due to expected inflation. So the correct answer is option b
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