5 concepts
Introducing Aggregate Supply
Aggregate supply is the total supply of goods and services that firms in a national economy plan to sell during a specific time period.
The Slope of the Short-Run Aggregate Supply Curve
In the short-run, the aggregate supply curve is upward sloping.
The Slope of the Long-Run Aggregate Supply Curve
The long-run aggregate supply curve is perfectly vertical; changes in aggregate demand only cause a temporary change in total output.
Moving from Short-Run to Long-Run
In the short-run, the price level of the economy is sticky or fixed; in the long-run, the price level for the economy is completely flexible.
Reasons for and Consequences of Shifts in the Short-Run Aggregate Supply Curve
The short-run aggregate supply shifts in relation to changes in price level and production.