16Chp22-Econ3310 - Aggregate Supply Equilibrium Analysis 1...

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Unformatted text preview: Aggregate Supply Equilibrium Analysis 1. Technology 2. Price of raw materials P M (oil) Wage push: successful strikes for higher wages, SRAS shifts left Supply shocks: change in production costs unrelated to wages: Expected price level: higher bargained wages W ↑, SRAS shifts left If Y > Y n , firms bid up wages W ↑ and SRAS shifts left If Y < Y n , firms lower wages W ↓ and SRAS shifts right Costs of production: Tightness of the labor market Factors that Shift SRAS Aggregate Demand ...
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