Aggregate Supply Flashcards
1
Q
Aggregate Supply
A
- quantity of good and services that producers are willing and able to supply at a given level of prices in a given time period
2
Q
SRAS
A
relationship between planned national and the general price level
3
Q
Causes of shift in SRAS (internal)
A
- Change in resource (input) prices
- Business taxes, subsidies, regulations and imported costs
- Costs of imported components
- Unexpected Supply Shocks
4
Q
Causes of shift in SRAS (external)
A
- world oil + gas prices
- Energy prices / costs
- other mineral / metal prices
- foodstuff price
- Import tariffs + quotas
5
Q
Causes of fall in AS
A
- Brain drain
- Production shut downs
- Higher costs from commodity prices
- Effects of natural disasters
6
Q
Macro consequences
A
- May cause higher inflation
- May reduce real GDP growth
- May lead to lower profits + I + employment
- worsen trade balance
