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Changes in expectations significantly influence the Short-Run Aggregate Supply (SRAS) curve by altering firms' production decisions and cost structures. When businesses expect higher future prices, they may increase their current output, shifting the SRAS curve to the right. Conversely, if firms anticipate lower future prices or economic downturns, they might reduce production, causing a leftward shift in the SRAS curve. Thus, expectations about future economic conditions can lead to immediate changes in supply dynamics.
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