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Economics 2.3.2 - Coggle Diagram
Economics 2.3.2
changes in costs of raw material and energy
higher costs increase production costs
shifts AS to the left
lower costs decrease production costs
shifts AS to the right
changes in exchange rates
affects prices of imported goods and services
appreciation of currency makes imports cheaper so costs of production decrease
shifts SRAS to the right
depreciation of currency makes imports more expensive so costs of production increase
shifts SRAS to the left
UK is heavily dependent on imports
cost push inflation
changes in tax rates
affects costs and profitability
higher tax rates increase costs
shifts SRAS left
lower tax rates decrease costs
shifts SRAS right