Economics A-Level: Aggregate Supply

Choose a study mode

Play Quiz

Study Flashcards

Spaced Repetition

Chat to Lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

An increase in the minimum wage is most likely to cause which of the following?

A rightward shift of the short run aggregate supply curve.
A decrease in the short run aggregate supply. (correct)
No impact on the short run aggregate supply curve.
A movement along the short run aggregate supply curve.

If a country experiences a significant advancement in technology, what is the likely effect on the long-run aggregate supply (LRAS)?

The LRAS curve will shift to the left.
The LRAS curve will shift to the right. (correct)
There will be a movement along the LRAS curve.
The LRAS curve will remain unchanged.

Which of the following changes is least likely to shift the short run aggregate supply curve?

A change in the price of raw materials.
A change in labour productivity.
A change in the level of business taxes.
A change in the general price level. (correct)

A decrease in the size of the labor force is most likely to cause which of the following?

<p>A decrease in the long run aggregate supply. (C)</p> Signup and view all the answers

Which of the following factors does NOT directly influence a shift in the long-run aggregate supply (LRAS)?

<p>Changes in the price level. (B)</p> Signup and view all the answers

Flashcards

Aggregate Supply (AS)

The total quantity of goods and services that all producers in an economy are willing and able to supply at different price levels in a given time period.

Aggregate Supply Curve

The AS curve shows the relationship between the price level (general price level) and the quantity of real output supplied. It represents the sum of all the individual supply curves in an economy.

Keynesian Range

A situation where the economy is operating below its full capacity, meaning resources are not being fully utilised and there is spare capacity. This is shown by the flat section of the AS curve.

Intermediate Range

A situation where the economy is reaching its full capacity, meaning resources are mostly fully utilised and it's difficult to increase production quickly. This is shown by the steeper section of the AS curve.

Signup and view all the flashcards

Classical Range

When the economy is at its absolute maximum potential due to fully utilised resources, represented by the vertical part of the AS curve. Any further increase in prices will not lead to an increase in output. This is also known as the 'vertical range' or 'classical range'.

Signup and view all the flashcards

Study Notes

Economics A-Level Notes - Aggregate Supply

The document is a PDF file related to aggregate supply, a key concept in economics, at the A-Level.
It's likely part of a larger unit on macroeconomic concepts and models, such as supply-side economics.