2.3 AS Flashcards
1
Q
Aggregate Supply
A
the volume of goods + services produced within the economy at a given price level
2
Q
Why is the supply curve upwards sloping?
A
firms are willing to supply more BUT only at a higher price
3
Q
Difference between SRAS and LRAS
A
short run - at least one FOP is fixed; long run - all FOPs are variable
4
Q
What causes SRAS to shift?
A
a change in the cost of production
5
Q
SRAS shift examples
A
changes in: costs of raw materials, exchange rates, tax rates
6
Q
2 types of LRAS
A
classical (vertical) + keynesian
7
Q
Factors affecting LRAS
A
tech advances, changes in relative productivity, changes in education + skills, demographic changes + migration
8
Q
What causes a shift in LRAS
A
an increase/decrease in the quantity or quality of the FOPs
