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SLOPE, SHORT-RUN AGGREGATE SUPPLY CURVE: The short-run aggregate supply (SRAS) curve has a positive slope, reflecting the direct relation between the price level and aggregate real production. A higher price level is related to more real production and a lower price level is related to less real production. The general reason is similar to that of market supply curves--the opportunity cost of production--three specific reasons can be identified: (1) inflexible resource prices that often makes it easier to reduce aggregate real production and resource employment when the price level falls; (2) the pool of natural unemployment, consisting of frictional and structural unemployment, that can be used temporarily to increase aggregate real production when the price level rises; and (3) imbalances in the purchasing power of resource prices that can temporarily entice resource owners to produce more or less aggregate real production than the would at full employment.
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AGGREGATE SUPPLY The total (or aggregate) real production of final goods and services available in the domestic economy at a range of price levels, during a given time period. Aggregate supply, usually abbreviated AS, is two different relations between price level and real production--long run and short run. With long-run aggregate supply, prices and wages are flexible and all markets are in equilibrium. With short-run aggregate supply some prices and wage are NOT flexible and some markets are NOT in equilibrium. This is one half of the AS-AD (aggregate market) analysis. The other half is aggregate demand.
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YELLOW CHIPPEROON [What's This?]
Today, you are likely to spend a great deal of time visiting every yard sale in a 30-mile radius hoping to buy either a packet of address labels large enough for addresses of both the sender and the recipient or a key chain with a built-in flashlight and panic button. Be on the lookout for telephone calls from former employers. Your Complete Scope
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The 22.6% decline in stock prices on October 19, 1987 was larger than the infamous 12.8% decline on October 29, 1929.
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"A man is not finished when he is defeated. He is finished when he quits. " -- President Richard Nixon
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RGDP Real Gross Domestic Product
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