Aggregate Supply

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Short Run Aggregate Supply

Short Run Aggregate Supply 

The total planned output when prices can change but productivity and availability of all factors of production are constant. 

Shifts in AS

  • Change in raw material costs
  • Government intervention eg taxes/subsidies
  • Change in employment costs
  • Exchange rates
  • Shocks
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Long Run Aggregate Supply

Long Run Aggregate Supply - A measure of the countries potential output when inputs, prices and wage rates are variable. 

Shifts in LRAS are caused by; 

  • Investment 
  • Increased workforce
  • More skilled workforce
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