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
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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