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Flashcards in Short Term Aggregate Supply Deck (7)
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1
Q

short-run aggregate supply

A
  • a measure of the relationship between average price levels and real output levels in a short term situation of increase production levels at a desired higher price level
  • the increase in output is not sustainable, because in order to maintain the new level of production, businesses would have to increase wages or hire more workers, which would decrease their profits
  • a good example of this would be the short-term increase in production around the holiday season
2
Q

x-axis

A

real output

3
Q

y-axis

A

average price level

4
Q

if average price level decreases, what happens to the real output

A

it decreases

5
Q

relationship between APL and RO creates which of the following for the SRAS curve

A

positive result

6
Q

which can occur when production is at a high level in a short-run

A

increase in wage

7
Q

increase in aggregate price will do what

A

increase real output