AS

Question 1

Aggregate Supply

Answer 1

The total amount of output in the economy at any given price at a moment in time

Question 2

Short Run

Answer 2

the period of time when at least one factor of production is fixed

Question 3

Long Run

Answer 3

all factors of production are variable

Question 4

What does the SRAS curve cover

Answer 4

the period immediately after a change in the price level

Question 5

Factors influencing SRAS

Answer 5

Cost of energy and raw materials may change

Stronger currency reduces price of imports

Higher tax rates increase business costs

Question 6

What does the LRAS curve cover

Answer 6

the potential supply of an economy in the long run

Question 7

Keynesian LRAS Curve

Answer 7

Price level fixed until resources are fully employed

Question 8

Classical LRAS Curve

Answer 8

All factors of production are fully employed in the long run

Question 9

Factors influencing LRAS

Answer 9

Technological advances - Better tech means better quality and quantity of goods

Change in productivity - Better quality and quantity of input means a larger higher quality output

Change in education - Improves human capital meaning they are able to produce better output

Change in regulation - Government can limit efficiency

Migration - Size of labour force increases so does output