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Topic: Aggregate supply


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  Aggregate demand - Wikipedia, the free encyclopedia
Carefully using ideas from the theory of supply and demand, aggregate supply can help determine the extent to which increases in aggregate demand lead to increases in real output or instead to increases in prices (inflation).
In Marxian economics, the equation of aggregate demand with expenditure on GDP is rejected as false, on conceptual and statistical grounds.
Aggregation of individual demand to total, or market, demand - a similar discussion to this article but discussing the attempts to build aggregate demand up from a microeconomic basis.
en.wikipedia.org /wiki/Aggregate_demand   (1392 words)

  
 Aggregate supply - Wikipedia, the free encyclopedia
In economics, aggregate supply is the total supply of goods and services by a national economy during a specific time period.
Sometimes the "Z curve" in the "Keynesian cross" diagram is referred to as "aggregate supply." This curve often represents the total amount of production that corresponds to the total amount of income in a country during a specific time period.
In neo-Keynesian theory seen in many textbooks, an "aggregate supply and demand" diagram is drawn that looks like a typical Marshallian supply and demand diagram.
en.wikipedia.org /wiki/Aggregate_supply   (540 words)

  
 Aggregate Demand and Aggregate Supply
Aggregate supply and aggregate demand is an attractive framework because it is simple, with the same structure as supply and demand.
However, the assumptions behind aggregate supply and aggregate demand are totally different from those behind supply and demand, that is, aggregate supply and aggregate demand curves are not obtained by adding up all the supply and demand curves in an economy.
So far the expositions of aggregate supply and aggregate demand have been fuzzy about what is fixed in the short run that is not fixed in the long run.
ingrimayne.saintjoe.edu /econ/optional/ISLM/Aggregate.html   (938 words)

  
 Principles of Macroeconomics - Section 7: Business Cycles, Aggregate Demand and Aggregate Supply
Aggregate demand is effective in changing economic growth only when aggregate demand is shifting along the relatively flat part of aggregate supply.
Aggregate demand was reaching the vertical portion of the aggregate supply curve.
Once aggregate demand reaches the area of potential output (the steep part of the aggregate supply curve), the Fed will fine-tune the growth rate of aggregate demand to equal the growth rate of potential output or aggregate supply.
www.colorado.edu /Economics/courses/econ2020/section7/section7-main.html   (6967 words)

  
 Out.macrointro4
As before, each of the curves is meant to summarize the behavior of a group of decision makers, although in this case the aggregate supply curve represents the behavior of suppliers and demanders in the aggregate output market.
The aggregate supply curve represents the behavior of producers of the goods and services included in GDP - the manufacturing firms that produce your automobiles and the law firms that provide legal services.
Aggregate supply, meanwhile, depends upon the price of the inputs and their productivity.
www.uri.edu /artsci/newecn/Classes/Art/INT1/Mac/Intro/Out.intromodel.html   (898 words)

  
 Aggregate Supply and Demand
These curves look and operate so much like the standard supply and demand curves featured at the heart of microeconomics that it is somewhat surprising it took so long for the aggregate supply and demand curves to become this popular.
Explain that the events you are about to describe will initially cause aggregate supply or aggregate demand curves to increase or decrease, or lead to a movement along the aggregate supply and aggregate demand curves without causing them to shift.
Aggregate supply and aggregate demand analysis deals with all of the productive resources in an economy; with all of the spending by households, businesses, and the government; with monetary and fiscal policies; and with international trade— all at the same time!
www.glc.k12.ga.us /BuilderV03/lptools/lpshared/lpdisplay.asp?Session_Stamp=&LPID=4403   (2495 words)

  
 Aggregate Supply   (Site not responding. Last check: 2007-10-06)
The short-run aggregate supply curve is upward sloping.
As a result, the long-run aggregate supply curve is a vertical line at the full employment GDP level.
The long run aggregate supply curve does shift over time as a result of labor-force growth, enhancement of human capital, advances in technology, and the discovery of new resources.
www.swlearning.com /economics/cebula/macro_d02_dialog.html   (384 words)

  
 AGGREGATE DEMAND AND AGGREGATE SUPPLY, AGAIN:
In the long run, the aggregate supply curve is vertical at the full employment level of GNP {the natural rate of unemployment}.
The most famous supply shock of the past 30 years was the OPEC oil embargo of the early 1970's.
Changes in the natural rate of unemployment are changes in the position of the long run aggregate supply curve, which is considered to be vertical, i.e., the level of GNP at the natural rate of unemployment is not responsive to changes in the price level.
teachx.rutgers.edu /gag/NOTES/macnotes2.html   (2032 words)

  
 Revision Guru
Aggregate Supply measures the volume of goods and services produced within the economy at a given aggregate price level.
Aggregate supply is determined by the supply side performance of the economy.
Long run aggregate supply is determined by the productive resources available to meet demand and by the productivity of factor inputs (labour, land and capital).
www.revisionguru.co.uk /economics/aggsupply1.htm   (409 words)

  
 15 Aggregate Demand and Aggregate Supply
A decrease in one of the determinants of aggregate supply shifts the curve to the left:
Adverse shifts in aggregate supply cause stagflation—a period of recession and inflation.
The are three theories explaining the upward slope of short-run aggregate supply:  the misperceptions theory, the sticky-wage theory, and the sticky-price theory.
people.morehead-st.edu /fs/t.creahan/ch15adas.htm   (1274 words)

  
 Introduction to Macroeconomics Chapter 19 Problems
A change in the aggregate output of the economy (a movement along an aggregate supply curve) implies a change in aggregate income.
If high unemployment is situation (e.g., recession) and the aggregate supply curve is positively sloped (upward sloping rather than flat), an increase in either aggregate demand or aggregate supply will move the economy closer to full employment.
Utilizing the aggregate demand and aggregate supply theory developed in this chapter, explain the possible trade-offs that would have to be made in attaining full employment.
mason.gmu.edu /~tlidderd/104/ch19Prob.html   (860 words)

  
 Online Learning Center
The short-run aggregate supply curve is upward sloping: An increase in the price level increases business revenues and profits because nominal wages are fixed; in contrast when the price level decreases business revenue and profits decline and so does real output.
The short-run aggregate supply curve which was based on fixed nominal wages now decreases (shifts left) resulting in an even higher price level and with real output returning to its initial level.
If aggregate supply is constant and the economy is operating in the upsloping range of aggregate supply then the greater the rate of increase in aggregate demand the higher the rate of inflation (and output) and the lower the rate of unemployment.
www.mhhe.com /economics/mcconnell/student/olc/outline16.htm   (1437 words)

  
 Renshaw: Essay 8
The "flattish" nature of the aggregate supply function can be validated to some extent, however, by examining first differences in the year-year growth rates for real GDP and its deflator during years containing recessionary troughs in economic activity.
The first regression in Table 8.1, which represents supply growth equation (8), is dominated by the growth rate for wages and salaries per full time equivalent employee in domestic industries.
A zero growth marginal cost intercept value can be calculated each year for our supply growth equation (8) by subtracting one-half of the actual growth rate for real GDP in column (3) of Table 8.4 from the inflation rate for its implicit price deflator in column (2).
www.albany.edu /~renshaw/leading/ess08.html   (3722 words)

  
 The aggregate supply curve
Another factor that determines the position of the aggregate supply curve is the state of technology.
Aggregate demand curve DD and aggregate supply curve SS intersect at point E, where real GDP is $6,000 billion and the price level is 100.
As the aggregate supply curve shifts in from SoSo to S1S1 in Figure 27-6 the size of the inflationary gap declines.
bernard.pitzer.edu /~lyamane/bandb.html   (5193 words)

  
 Aggregate demand and aggregate supply
When considering aggregate supply, it is particularly important to distinguish between the short run and the long run.
LONG-RUN AGGREGATE SUPPLY The long-run aggregate supply (LRAS) curve indicates thc relationship between the price level and quantity of output after decision makers have had sufficient time to adjust their prior commitments in light of any previously unexpected changes in market prices.
The accompanying "Thumbnail Sketch" summarizes the factors that explain the general characteristics of aggregate demand, short-run aggregate supply, and long-run aggregate supply.
pzacad.pitzer.edu /~lyamane/gands.html   (1442 words)

  
 Chapter 8.2: Aggregate Demand & Supply   (Site not responding. Last check: 2007-10-06)
Aggregate demand (AD) in the relationship between the amount of total output demanded and the average price level.
The aggregate supply curve (AS) is upward sloping, but with a changing slope.
If prices rise, then suppliers get an increase in the price they receive, but their costs do not increase by the same amount.
www.oswego.edu /~edunne/200ch8_2.html   (1043 words)

  
 MyCourse 2.1 > QT Questions > Aggregate Demand and Aggregate Supply   (Site not responding. Last check: 2007-10-06)
aggregate supply shifts left, the price level rises, and real output falls.
One explanation for the positive slope of the short-run aggregate supply curve is the fact that:
The short-run aggregate supply curve will be positively sloped only if the price level is consistent with people's expectations about the price level.
mycourse.thomsonlearning.com /qte98/owa/assignment_start?f_sess_id=0&f_asns_id=18632   (900 words)

  
 Tutor2u - Aggregate Supply
Aggregate Supply (AS) measures the volume of goods and services produced within the economy at a given overall price level.
An increase in demand should lead to an expansion of aggregate supply in the economy.
In the long run we assume that supply is independent of the price level (money is neutral) - the productive potential of an economy (measured by LRAS) is driven by improvements in productivity and by an expansion of the available factor inputs (more firms, a bigger capital stock, an expanding active labour force etc).
www.tutor2u.net /economics/content/topics/ad_as/aggregate_supply.htm   (436 words)

  
 Aggregate Supply and Demand
Aggregate demand is the amount people will spend, or money multiplied by velocity.
Because it assumes there are no adjustment problems, the aggregate supply curve is the vertical line shown in the graph above as the T curve.
Changes in the resource market are transferred to the goods-and-services market via the aggregate supply curve.
ingrimayne.saintjoe.edu /econ/Money/agg_sup_dem.htm   (507 words)

  
 Tutor2u - long run aggregate supply
They clearly have short run effects - but we should really judge supply-side policies by measuring the extent to which the United Kingdom economy is able to sustain economic growth over a number of years and raise total employment and average living standards.
Long run aggregate supply is determined by the productive resources available to meet demand and also by the productivity of factor inputs (labour, land and capital).
Supply does respond to change in price in the short run - we move up or down the short run aggregate supply curve.
www.tutor2u.net /economics/content/topics/supplyside/agg_supply.htm   (214 words)

  
 [No title]
This represents a movement along the aggregate demand curve, not a shift in the curve.
Aggregate Supply The aggregate supply curve is the aggregation of the individual supply curves for all goods and services provided in the economy.
The aggregate supply curve also has a slightly different interpretation than the supply curve for an individual industry.
web.nps.navy.mil /~brgates/documents/macronotes/ad-as.doc   (1830 words)

  
 Fiscal policy and employment   (Site not responding. Last check: 2007-10-06)
Here AD is the aggregate demand curve, SRAS the short-run aggregate supply curve, LRAS the long-run aggregate supply curve.
Now let's suppose that there is a positive shock to aggregate demand, say from either a tax cut or increased government spending.
But then, over time, the aggregate supply curve shifts upward, and output returns to its original level.
www.wws.princeton.edu /~pkrugman/fiscal.html   (738 words)

  
 [No title]
Use the aggregate demand-aggregate supply model to illustrate graphically the impact in the short run and the long run of a Federal Reserve decision to increase open-market purchases.
The aggregate demand curve is Y = 3(M/P) and M = 1,000.
 25.Assume that the long-run aggregate supply curve is vertical at Y = 3,000 while the short-run aggregate supply curve is horizontal at P = 1.0.
www.cba.ua.edu /~jlee/macro/pr9.doc   (1225 words)

  
 AmosWEB eTutor: Aggregate Supply: Lesson Menu
Aggregate supply however, is somewhat more involved than market supply.
Aggregate supply as the supply side of the aggregate market.
The vertical long-run aggregate supply curve and the positively-sloped short-run aggregate supply curve.
www.amosweb.com /cgi-bin/prv_lsn.pl?lsn=32   (464 words)

  
 The Aggregate Supply Curve
Aggregate supply is the supply of all goods and services.
There is considerable disagreement among economists about the meaning and shape of the aggregate supply curve.
The AS curve shows the relationship between the total supply of goods and services in the economy and the price level.
wps.prenhall.com /bp_casefair_econf_7e/0,8233,2032226-,00.html   (210 words)

  
 Aggregate Supply
A shift in aggregate supply can be attributed to a number of variables.
In the short run, aggregate supply responds to higher demand (and prices) by bringing more inputs into the production process and increasing utilization of current inputs.
In the long run, however, aggregate supply is not affected by the price level and is driven only by improvements in productivity and efficiency.
www.investopedia.com /terms/a/aggregatesupply.asp   (280 words)

  
 Aggregate Supply / Aggregate Demand Model
Aggregate demand is the demand of all products in an economy - OR the relationship between the Price Level and the level of aggregate output (real GDP) demanded.
Just like with supply and demand in the individual product market, there are determinants that will shift the AS and AD curves.
Aggregate Supply is the supply of all products in an economy - OR the relationship between the Price Level and the level of aggregate output (real GDP) supplied.
www.harpercollege.edu /mhealy/eco212i/lectures/asad/asad.htm   (3893 words)

  
 CEPR Discussion Paper Abstracts   (Site not responding. Last check: 2007-10-06)
The New-Keynesian aggregate supply derives from micro-foundations an inflation-dynamics model very much like the tradition in the monetary literature.
Inflation is primarily affected by: (i) economic slack; (ii) expectations; (iii) supply shocks; and (iv) inflation persistence.
This Paper extends the New Keynesian aggregate supply relationship to include also fluctuations in potential output, as an additional determinant of the relationship.
www.cepr.org /pubs/dps/DP4217.asp   (171 words)

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