Aggregate Supply - Macro

Question 1

Aggregate Supply Definition

Answer 1

Total output of goods and services produced in economy at different price levels

Slope depends on one of three theories followed

Question 2

Classical aggregate supply curve

Answer 2

Completely vertical supply curve; output does not change as prices change;

Question 3

Keynesian

Answer 3

Horizontal up to the output at full employment then curves upward; increasing supply @ price until full employment then increased supply only with increased price

Question 4

Conventional aggregate supply curve

Answer 4

Continous positive slope that is steeper for output after full employment; at full employment prices increase proportionally faster than output of quantity

Question 5

Aggregate Equilibrium

Answer 5

Aggregate demand = Aggregate supply

X = Real Output
Y = Price Level