3.2 AS

Question 1

AS

Answer 1

planned levels of output domestic firms are willing and able to offer at different average price levels

Question 2

short run AS conditions

Answer 2

1. wages fixed
2. unable to adjust to changes in apl
3. cost of production fixed

Question 3

factors causing shifts in short run AS

Answer 3

1. money wages change (e.g. min wage)
2. energy prices change
3. indirect taxes of subsidies change - affects COP. increase tax = increased COP = decreased SRAS

Question 4

long run AS assumptions

Answer 4

1. wages assumed to be fully flexible
2. and fully adjusting to changes in APL

this means any change in AD results in changes in APL while real output remains the same as LRAS is vertical

Question 5

reasons for shift in LRAS

Answer 5

1. quantity of FOP: econ more capable = increased output
2. quality of FOP: + edu and skills = + productivity.
3. improvements in tech
   4, efficiency increases when econ makes better use of resources
4. institutional changes: improvements in framework increases productive capacity. decreased bureaucracy facilitates economic activity = ++ output = ++LRAS

Question 6

stopped at keynes