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------------------------------------------------- AGGREGATE SUPPLY Definition immix organic (AS) standards the loudness of goods and services produced within the delivery at a accustomed price level.| Short strike Aggregate Supply (SRAS) - shows bring planned output when prices in the economy plenty swap but the prices and productivity of each(prenominal) factor inputs e.g. wage rate and the rural area of technology be assumed to be held constant. Price LevelSRAS documentary (GDP) A change in the price level (for vitrine brought nigh by a shift in AD) results in a movement along the short abide meat supply curve. The SRAS is upward sloping because: One it reaches a original tear down it begins vertical because you atomic number 18 using maximum capacity so it becomes vertical As output increases equal per unit increase, because you mustiness pay overtime we inefficient machine thus it cost increase composite | Shifts in SRAS |   Long run Aggregate Supply (LRAS) LRAS shows total planned output when both prices and ordinary wage rates can change it is a measure of a rural areas potential output and the excogitation is linked powerfully to that of the production possibility frontier. There be two theories close to the shape of the LRAS i.e. the neoclassical opine and the Keynesian view: The Classical View: In the long run an economy pull up stakes be in equilibrium at full utilisation level of output. rationale:| Keynesian view: An economy can be in equilibrium at levels of output another(prenominal) than full employment because wages are sticky downwards. Rationale| Shifts in LRAS - are caused by increases in the quantity and/or quality of the factors of production. Examples:|If you want to get a full essay, clubhouse it on our website: BestEssayCheap.com

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