Download Aggregate Supply

April 4, 2014
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Missed exam day(s) last week???
Unit V Quick Intro: Inflation,
Unemployment, & Stabilization Policies
(20-30% of AP Macro Exam)
Unit Exam Date: Thursday, April 17th
Review past 2 days…
Notes: Policy Effects on AS
HW: Activities 5-4 and 5-5
Quiz: Fiscal Policy- Monday!
Policy Effects on Aggregate Supply
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Fiscal & Monetary Policy affect the economy through changes
in AD.
Also policies that can affect SRAS and LRAS.
Recall the SRAS determinants:
Economy wide input prices (labor, oil)
Wages
Advanced Technology
Recall the LRAS determinants:
Available resources
Higher quality resources
Advanced technology
Shifts of the Short-Run
Aggregate Supply Curve
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A supply shock is a change in costs that shifts
the aggregate supply (AS) curve.
Long-Run Aggregate
Supply and Policy Effects
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If the AS curve is vertical
in the long run, neither
monetary policy nor fiscal
policy has any effect on
aggregate output.
• In the long run, the
multiplier effect of a change
in government spending or
taxes on aggregate output
is zero.