1.3 Aggregate supply Flashcards
1
Q
Define short-run aggregate supply
A
a curve showing how much output firms would be willing to supply in the short run at any given price
2
Q
What determines the position of SRAS on a graph
A
the costs of production in the economy
3
Q
Factors that determine the cost of production
A
Wages, Raw material prices, oil price, business tax, Import prices - exchange rate
4
Q
What determines the position of LRAS
A
Quality and quantity of FOPs
5
Q
factors affecting quality and quantity
A
Labour productivity, Investment, Infrastructure, Quantity of Labour, Competition, New resource discoveries
6
Q
What is the relationship between AS and PL
A
The relationship is positive
