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10 Cards in this Set
- Front
- Back
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Aggregate supply |
The amount that firms are willing to produce st various price levels over a period of time |
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Movement along AS |
This occurs when there is a change in price level. An increase in price level will encourage producers to supply more and vice versa |
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Shift in AS |
The total output that producers are willing and able to supply at any given time has altered |
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Short run AS |
The price inputs and productivity levels are constant |
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Long run AS |
The productive potential of all firms when all factors are variable |
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Classical LRAS |
Vertical line, in the long run, an economy will operate at full capacity and there will be no unemployed resources |
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Keynesian LRAS |
There can be spare capacity in the economy even in the long run because markets do not clear as suggested by classicals |
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Shift in long run AS |
Shifts because of changes in productive capacity |
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What factor shifts the SRAS |
Changes in the cost of production |
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6 key factors that shift LRAS |
-technological advances -changes in relative productivity -changes in education and skills -changes in government regulations -demographic changes and migration -competition policy |
