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Aggregate supply - Coggle Diagram

- - - - Net investment
        
        If total invesment exceed depreciation there will be additions to the capital stock
      - Net imagination
        
        If the immigrants are of working age, this will increase the size of the labour force
      - An increase in retirement age
        
        This will increase the size of the labour fore and so supply increase
      - More women entering the labour force
        
        This will increase the size of the labour force so supply will also increase
      - Discovery of new resources
        
        The discovery of new oil fields or gold mines can increase a country's productive potential
      - Land reclamation
        
        The land could be use to built houses, hotels, marinas, theme parks and beaches
- - - - The profit effect
        
        As price level increases and the cost of production does not change, the difference between cost and revenue increases, resulting more profit, motivating firms to produce more.
      - The cost effect
        
        Even though the cost of resources is unchanged in the short run, average costs might increase (overtime pay, recruitment costs, etc.) Producers will require higher prices to cover these extra costs.
      - The misinterpretation
        
        Producers might think they ae getting paid more for their products because it is bcoming more popular and as a result they are encouraged to produce more.
    - - A change in taxes on firms such as a reduction in corporation tax or indirect taxes will cause an increase in the short run aggregate supply
      - A change in the price of factors of production such as an increase in wage rates will cause the curve to shift to the left.
      - A change in factor productivity/quality of resources such as an increase in labour productivity will cause an increase in aggregate supply both short run and long run