Aggregate Supply - Macro Flashcards Preview

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Flashcards in Aggregate Supply - Macro Deck (5):
1

Aggregate Supply Definition

Total output of goods and services produced in economy at different price levels

Slope depends on one of three theories followed

2

Classical aggregate supply curve

Completely vertical supply curve; output does not change as prices change;

3

Keynesian

Horizontal up to the output at full employment then curves upward; increasing supply @ price until full employment then increased supply only with increased price

4

Conventional aggregate supply curve

Continous positive slope that is steeper for output after full employment; at full employment prices increase proportionally faster than output of quantity

5

Aggregate Equilibrium

Aggregate demand = Aggregate supply

X = Real Output
Y = Price Level

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