4. Aggregate Supply
g. explain the aggregate supply curve in the short run and long run;
What three factors does the aggregate quantity of goods and services supplied depend on?
- Y = F(L, K, T)
- L = Labor
- K = Capital
- T = Technology
What is (and what is the shape of) the short-run aggregate supply curve? The short-run aggregate supply curve goes up-and-right, with Y-axis of Price level, and X-axis of real GDP.
What is the shape of the long-run aggregate supply curve? The long-run aggregate supply curve is a vertical bar, with Y-axis of Price level, and X-axis of real GDP.
Source:
CFA
Graph:
- 115.030.30 Economics - Reading 14 - Aggregate Output, Prices, and Economic Growth to 115.030.30.04 Economics - Reading 14 - 4. Aggregate Supply