Aggregate Supply - Definitions Flashcards
1
Q
Aggregate Supply
A
The overall supply of goods and services in an economy
2
Q
Short run
A
The period in which only one factor of production (usually labour) is variable, and the other is
fixed (usually capital)
3
Q
Long run
A
The period in which all factors of production are variable
4
Q
Classical LRAS
A
A vertical long-run aggregate supply curve, assuming that the economy is operating at maximum
capacity
5
Q
Keynesian LRAS
A
An upward-sloping long-run aggregate supply curve, allowing for an output gap in the economy
