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What is Aggregate Supply? Video Lecture | Economics Class 12 - Commerce

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FAQs on What is Aggregate Supply? Video Lecture - Economics Class 12 - Commerce

1. What is aggregate supply?
Ans. Aggregate supply refers to the total value of goods and services produced in an economy over a specific period. It represents the total supply of goods and services available at different price levels.
2. How is aggregate supply determined?
Ans. Aggregate supply is determined by various factors, including the availability of resources, technological advancements, labor force, and production capacity. Changes in these factors can lead to shifts in the aggregate supply curve.
3. What is the difference between short-run and long-run aggregate supply?
Ans. Short-run aggregate supply represents the total output that firms in an economy are willing to produce at different price levels in the short term. On the other hand, long-run aggregate supply represents the maximum potential output that an economy can produce in the long term when all factors of production are fully utilized.
4. What factors can cause shifts in the aggregate supply curve?
Ans. Several factors can cause shifts in the aggregate supply curve, including changes in input prices (such as wages and raw materials), changes in productivity, changes in government regulations or taxes, changes in the labor force, and technological advancements.
5. How does aggregate supply impact the economy?
Ans. Aggregate supply plays a crucial role in shaping the overall performance of an economy. When aggregate supply increases, it leads to economic growth, lower unemployment rates, and potentially lower inflation. Conversely, a decrease in aggregate supply can result in economic slowdown, higher unemployment rates, and inflationary pressures.
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