Chapter 9

Question 1

Aggregate supply (AS) curve

Answer 1

shows the positive relationship between between price level and RGDP supplied. There are 2 curves, the short run (SRAS) and Long run (LRAS) curves.

Question 2

Short-run aggregate supply (SRAS) curve

Answer 2

relationship between RGDP and price level when output prices can change but input prices are unable to adjust.

Question 3

Long-run aggregate supply (LRAS) curve

Answer 3

relationship between RGDP and price level which output prices and input prices can fully adjust to economic change.

Question 4

Why producers are willing to supply more output when price level increases? (short-run)

Answer 4

profit effect and misperception effect

Question 5

Profit effect

Answer 5

input prices are too slow because of long term contracts, so it increases their price margin and supply more.

Question 6

Factors that shift SRAS but do not impact LRAS

Answer 6

Wages and other input prices, productivity, unexpected supply shocks