ECO ch 13

total supply of all goods and services in an economy

• graph that shows the relationship between the aggregate quantity of output supplied by all firms in an economy and the overall price level
• Is NOT a market supply curve
• really a "price/output response" curve

The capacity of a AS curve. At this point the curve is vertical.

Change in costs that shifts the short-run AS curve

Price level at which the aggregate demand and aggregate supply curves intersect

Level of aggregate output that can be sustained in the long-run without inflation

Aggregate demand can shift to the right for a number of reasons, including an increase in the money supply, a tax cut, or a increase in govt spending