FIGURE 5 SHIFTS IN SHORT-RUN AGGREGATE SUPPLY
The determinants of short-run aggregate supply include changes in input prices, productivity, taxes, regulation, the market power of firms, and inflationary expectations. If one of these determinants changes, the entire short-run aggregate supply curve shifts. Increasing productivity, for instance, will shift the short-run aggregate supply curve to the right, from SRAS0 to SRAS1. Conversely, raising taxes or adding inefficient regulations can shift the short-run aggregate supply curve to the left, from SRAS0 to SRAS2.