Shifts in SRAS and LRAS curves

Steps:

• SRAS shifts right from lower input costs, increasing output at each price level.
• LRAS shifts right from productivity gains, raising potential output.
• Match options to causes: B links cost reductions to SRAS and education to LRAS.
• Eliminate mismatches: C and D reverse labor effects; A (if cost-push) doesn't fit both.

Why B is correct:

• SRAS shifts right due to lower raw material costs reducing production expenses; LRAS shifts right as education boosts worker productivity and long-run capacity.

Why the others are wrong:

• A: Fails to align specific cost decreases with SRAS and human capital with LRAS.
• C: Both factors decrease labor supply, shifting both curves left, not right.
• D: Labor increase shifts LRAS right but not necessarily SRAS; productivity fits LRAS but not as SRAS cause.

Final answer: B