Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

AS Economics > 2.3 Aggregate Supply > Flashcards

2.3 Aggregate Supply Flashcards

1
Q

What does short run mean?

A

At least one factor of production is fixed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What does a short run aggregate supply curve look like ?

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Why does the short run aggregate supply curve slope upwards?

A

Overtime

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is aggregate supply?

A

The total amount produced in an economy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What are the two types of long run aggregate supply (LRAS) curves?

A
  • Neoclassical
  • Keynesian
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

describe the keynesian LRAS curve

A
  1. at the start nothing is being produced, loads of resources are availible to it is easy to increase output
  2. as more is produced, resources run out, so it is harder to increase output
  3. economy cannot produce anymore because all resources are used up
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

draw the keynesian curve

A

sick back flip

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

what is spare capacity?

A

when an economy is producing below it’s maximum potential output

factors of production are not fully utilised

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

what is a bottleneck?

A

when an economy is nearly producing at it’s maximum potential output

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

what is the neoclassical long run aggregate supply model?

A
  • always at full employment
  • in the long run always time to have fully use up all it’s resources
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

neoclassical curve

A

similar to PPF

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

what causes the shifts to Long Run Agreggate Supply?

A
  • technological advances
  • changes in relative productivity
  • hnages in education and skills
  • changes in goverment regulations
  • demographic changs and migration
  • competition policy

for suppliers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

show shifts in the LRAS diagrams

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

how do oil prices (commodities) affect AS curve?

A
  • an increase will increase transportation/production costs
  • increase in costs
  • cannot afford to produce as much
  • decrease in SRAS
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

what are some commodities?

affect macro markets

A
  • oil,coal, gas : transportation
  • wheat, corn: all food
  • steel: electronic devices, skyskrapers

commodities: commony used

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

how do natural resources affect Aggregate Supply?

A
  • an increase in natural resoucres is an increase in land
  • increase in factors of production affect the LRAS
  • shift in LRAS
17
Q

how will investment impact aggregate supply?

A
  • increase in investment
  • increase in productivity of factors of production
  • shift in LRAS
18
Q

Model an economies short run equilibrium

A
19
Q

Model an economies long run equilibrium (Keynesian)

A
20
Q

Model an economies long run equilibrium with the neoclassical model

A
21
Q

What would the effect of a decrease in incomes have on an economies equilibrium?

A
22
Q

what evaluation can be used with keynesian curves?

A

However, the effect is dependant on where along the LRAS the econpmy is. If our initial equilibrium is at spare capacity (Y1,PL1), a decraese in AD from AD1 to AD2 will not affect the price level, only the real GDP will decrease

23
Q

How will the dot com bubble impact the economy equilibrium

A
24
Q

How will an increase in VAT impact the economy?

A
25
Q

define aggregate supply

A

total planned output of goods and servives in an economy at a given time and price level

26
Q

define short run aggregate supply

A

aggregate supply when at least one factor of production is fixed

27
Q

what factors cause shifts in short run AS?

A
  • changes in costs of raw materials/ energy
  • changes in exchange rates
  • changes in tax rates

all affect the cost of production

AS Economics (24 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions