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Non - Price Level Factors(passive) Caused byShifts in Aggregate Supply
Institutional factors such as Government regulations that affect resource use efficiencyalso causeshift in aggregate supply
changes in aggregate demand(passive) are ... influenced byAggregate supply
aggregate supply sras ... an abrupt change in demandcausesshifts in aggregate supply
Anything that causes the amount of workers to increase in an economywill causeaggregate supply
the discovery of new natural resources(passive) caused byaggregate supply
costs faced by firms(passive) is influenced byAggregate supply
an increase in the costs of production(passive) caused byaggregate supply
increased prices for goods or services(passive) caused byaggregate supply
its definition ... differences between long run short run aggreate supplycausesshifts in aggregate supply
How fiscal policy can be usedto influenceaggregate supply
the state of technology only(passive) is influenced byAggregate supply
stagflation — a combination of recession ( falling output ) and inflation ( rising prices).Policy makers who can influence aggregate demand can potentially mitigate the adverse impact on output but only at the cost of exacerbating the problem of inflationcan causestagflation — a combination of recession ( falling output ) and inflation ( rising prices).Policy makers who can influence aggregate demand can potentially mitigate the adverse impact on output but only at the cost of exacerbating the problem of inflation
deflationary pressurestriggersdeflationary pressures
to higher unemployment and higher inflationleadsto higher unemployment and higher inflation
new short run Phillips curvescreatenew short run Phillips curves
prices to fallright causingprices to fall
If instead(passive) are caused byIf instead
stagflation – a combination of recession and inflationcan causestagflation – a combination of recession and inflation
stagflation Policy makers can influence aggregate demand in order to maintain output at its natural levelcan causestagflation Policy makers can influence aggregate demand in order to maintain output at its natural level
economic expansions and recessionscan causeeconomic expansions and recessions