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The short term aggregate supply curve represents the relationship between what?
Wiki User
∙ 15y ago
the IS curve represents the combination of interest rates and outputs that put the goods market in equilibrium
Wiki User
∙ 15y ago
The short term aggregate supply curve represents the relationship between the price level and the quantity of real GDP that firms are willing to supply in the economy. It shows the level of output that firms can produce in the short run at different price levels.
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What is Symbiotic relationship between human host and bacteria in the gut which supply the body with vitamin K?
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What relationship do you have with bacteria in your gut?
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Symbiotic Relationship between a pink river Dolphin and acanoda?
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Identify the three key element of hummen resources planning model and discuss the relationships among them?
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What is a relationship between plants and humans?
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Aggregate supply curve?
A graphed line showing the relationship between the aggregate quantity supplied and the average of all prices as measured by the implicit GDP price deflator.
What is the key difference between the classical and Keynesian aggregate supply functions?
Classical Aggregate Supply function is vertical whereas the Keynesian Aggregate Supply function is positively sloped.
What are Business cycles are linked to the interaction between?
the aggregate demand and aggregate supply curves.
What will happen when Aggregate demand and aggregate supply decrease?
When aggregate demand and aggregate supply both decrease, the result is no change to price. As price increases, aggregate demand decreases, and aggregate supply increases.
What is the long run aggregate supply curve?
The graphical relationship between RGDP and price level after input prices have been allowed to adjust in response to changes in output prices.
The supply curve shows the relationship between what?
the supply curve shows the relationship between
What would cause a decrease in aggregate supply?
Aggregate supply is the supply of all goods and services within a country. Which of the following would most likely cause a decrease in the aggregate supply
What is Simple theory of Income Determination?
Total income depends on total employment which depends on effective demand which in turn depends on consumption expenditure and investment expenditure. Consumption depends on income and propensity to consume. Investment depends upon the marginal efficiency of capital and the rate of interest. J. M. Keynes made it clear that the level of employment depends on aggregate demand and aggregate supply. The equilibrium level of income or output depends on the relationship between the aggregate demand curve and aggregate supply curve. As Keynes was interested in the immediate problems of the short run, he ignored the aggregate supply function and focused on aggregate demand. And he attributed unemployment to deficiency in aggregate demand.
What is the inflationary gap?
its the difference between long run and short run aggregate supply
Using the AD-AS framework what is the impact on equilibrium price and output when there are increase in aggregate demand and aggregate supply simultaneously?
AD-AS represents aggregate demand curve (AD) and aggregate supply curve (AS). "In the aggregate demand-aggregate supply model, each point on the aggregate demand curve is an outcome of the IS-LM model for aggregate demand Y based on a particular price level. Starting from one point on the aggregate demand curve, at a particular price level and a quantity of aggregate demand implied by the IS-LM model for that price level, if one considers a higher potential price level, in the IS-LM model the real money supply M/P will be lower and hence the LM curve will be shifted higher, leading to lower aggregate demand; hence at the higher price level the level of aggregate demand is lower, so the aggregate demand curve is negatively sloped
What is the Aggregate supply curve and its axis?
The aggregate supply curve show the relationship between price level and the quantity of goods and services that producers are willing to produce when their goods are at a certain price. On the x-axis is RGDP (representing quantity of goods that suppliers are willing to produce in terms of the value of the products adjusted for inflation). On the Y-axis is price level.
The quantity of full employment in the aggregate supply aggregate demand model is similar to the conditions in which other model?
The quantity of full employment in the aggregate supply aggregate demand model is similar to the conditions in which other model. (Market Supply and Demand.)
