ECN 203 (14), Aggregate Supply Changes and the Economy

ECN 203 (14), Aggregate Supply Changes and the Economy -...

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Chapter 14 -- Aggregate Supply and Economic Growth This chapter -- looks at the effects of changes in Aggregate Supply, both short-run and long-run. Correspondingly, we examine the causes that shift the AS curve and the LAS curve, and their effects on the economy.
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Short-Run Aggregate Supply (AS) Short-Run Aggregate Supply (AS) -- the sum of all the newly produced US final goods and services that firms wish to produce (real GDP supplied), given inflexible input prices (such as the nominal wage rate and the price of energy).
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Short-Run Aggregate Supply (AS) -- Causes Price Level (P) P AS Price of Energy (P E ) P E AS The Nominal Wage Rate (W) W AS
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Short-Run Aggregate Supply -- More Causes Labor Productivity (PROD), defined as output per labor hour. PROD AS Capital Stock (K) -- all the existing plant and equipment used by firms to produce goods and services. K AS
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Formalizing the AS Curve Upward sloping when graphed against Price Level (P). Changes in a cause other than P --
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ECN 203 (14), Aggregate Supply Changes and the Economy -...

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