aggregate supply

Question 1

what is aggregate supply

Answer 1

the total quantity of the supply of goods and services at a price level in a given period of time

Question 2

short-run determinants

Answer 2

cost of production
-wages
-raw material and commodity prices
-oil prices
-business tax
-cost of import

Question 3

what is meant by YFE

Answer 3

this is full employment in the economy
-all factors of production are being used to their maximum capacity and at sustainable levels

Question 4

factors which affect long-run aggregate supply

Answer 4

-quantity/quality of the factors of production
-labour productivity
-investment (tech, capital, r and d)
-infrastructure
-quanitity of labour(immigration/incentive)
-competition
-discovery of new resources

Question 5

what do Keynesian economists believe

Answer 5

-they believe that an economy does not just have one long-run level of output
-can be producing at max level of output without full employment