Week 3_6 Aggregate Supply

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Get to know Basic Concepts:

-- Aggregate Supply:

  • the total quantity of goods and services that firms plan to produce in a specific period.
  • the relationship between quantity of real GDP supplied and price level

=> This relationship is different in the short-run and long-run.

-- Long-run Aggregate Supply: The total quantity of goods and services that can be provided depends on the quantity of labour, capital and state of technology

 

-- Short-run Aggregate Supply: In line with the law of supply (microeconomics), the higher the price level, the higher the quantity of real GDP supplied.

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Question: 

Is the graph Long- or Short-Run Aggregate Supply?

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Discuss with fellow students in Discussion Forum. 
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Watch the Video:

Play media comment.Download the Download course slides

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