Unit 2, AOS1 Aggregate Supply

Question 1

Aggregate Supply

Answer 1

Willingness and ability of producers to produce.

Question 2

Production

Answer 2

The process of converting resources and input into g/s or the total volume of g/s produced over a given time period.

Question 3

Productivity

Answer 3

Measured by the output per unit of input.

Question 4

Productive capacity

Answer 4

The point at which production (or GDP) is occurring at the max level possible in an economy.

Question 5

The 8 Factors that Affect AS

Answer 5

1. Changes in gen level of prices (inflation)
2. The quantity of the factors of production (lab,cap,nat)
3. Quality of the factors of production (lab,cap, nat)
4. COPD- eg wages
5. Technological change
6. Productivity growth- labour prod, capital prod, multi-factor prod (both lab and cap prod combined)
7. Exchange rates- depreciation of AUD-> increased cost of imports vs appreciation of AUD-> decreased cost of imports
8. Climatic conditions