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aggregate supply - Coggle Diagram
aggregate supply
3 effects
the cost effect
decrease average cost = lower output
price increases to cover extra costs
the misinterpertation effect
encourage to produce more
prices might change due to confusion with changes in price
the profit effect
the price factor of production
price levels
types of AS
SRAS
Short run Aggregate supply
supplied when there has not been enough time for $ of FOP to change
As $ level increase, prod willingand able to supply more, this cuases the graph to slope up from left to right
LRAS
long run Aggregate supply
supplied when $ of FOP have fully adjusted
real GDP
total output that the producers in an economy are willing and able to supply at a given period of time
shifts in LRAS curve
change in quantity or quality of FOP
net immigration
net investment
more women enter workforce
in retirement age
discovery of new resources
land reclamation