Shapes%20of%20Aggregate%20Supply

1
Shapes of Aggregate Supply

• AD/AS Model Continued

2
Aggregate Supply Curve

• Aggregate-supply curve (AS)- how supply of goods
  services for the entire economy changes with
  inflation
• quantity of goods services all firms produce at
  each price level

Govt ? Income Taxes gt Consumer income ? C
? gt AD ? gt R-GDP ?
AD C I G NX
3
Different Shapes of AS Curves
AS Curves can have 3 different shapes The Shape
will depend on how prices/wages adjust to
inflation
Upward Sloping
Horizontal
Vertical
Px Level
Px Level
Px Level
AS
AS
AS
Real GDP
Real GDP
Real GDP
4
AS/AD Model

• AS/AD Model has 2 different AS curves
• Short run curve (SRAS) is upward sloping
• Long Run curve (LRAS) is vertical

5
Worksheet
6
Worksheet Review
Px Level
AS
AS
Px Level
Px Level
AS
Real GDP
Real GDP
Real GDP