Aggregate supply in the short run (L11)

Question 1

what does the curve look like when prices are fixed

Answer 1

AS is horizontal, vertical in LR

Question 2

if some prices are more sticky/ not all prices are fixed, what does the curve look like

Answer 2

AS curve is upward sloping

Question 3

sras

Answer 3

Y=Y+a(P-EP)
affected by price change, alpha represents how sticky prices may be

Question 4

when AD and SRAS meet before LR or after LR what does it show

Answer 4

before=recession
after= excess demand/boom

Question 5

phillips curve

Answer 5

inflation=expected inflation-b(cyclical unemployment) + supply shock
unemployment is inversely related to output-lowering inflation means you have to lower economic activity, so employment may fall (sacrifice ratio)