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What is Aggregate Supply? Video Lecture | Economics Class 12 - Commerce
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.
Text Transcript from Video
hey how you doing econ students this is
mr. Clifford welcome to ac/dc econ today
I'm going to learn about aggregate
supply the Agora supply curve is going
to show you the production of everything
inside the entire country it's not like
the market supply it's not the supply of
one product its supply of all products
so right here we have the price level
down here we have the real GDP produced
and we have an upward sloping short-run
aggregate supply curve so when the price
level increases producers will produce
more output like the market supply curve
this curve can shift an increase is to
the right and it decreases to the left
so there's a bunch of things will shift
this curve things like key resources so
there's an increase in the price of oil
or steel or labor and that would
definitely change the amount we can
produce another shifter would be
productivity if there's an increase in
machines and technology or just
machinery and capital stock then this
admin supply curve would shift to the
right because we can produce more
another shifter might be some sort of
government action that affects producers
like taxes or subsidies I've got four
scenarios right here I want you to
figure out which ones will increase or
decrease a grits supply so go down the
line pause the video and see how you do
an increase in nominal wages would mean
producers can't produce as much because
there's an increase in the price of a
key resource labor so the address supply
curve would shift to the left an
increase in physical capital means we
have more tools and more machinery and
so the address supply curve would shift
to the right because we can produce more
a significant decrease in corporate
taxes means producers would have more
money to produce more and so that would
shift the aggregate supply to the right
and for the last one if everyone expects
higher inflation in the future this is
going to decrease the aggregate supply
because business is going to have their
workers come to them and demand higher
wages because they expect higher prices
so if we expect an increase in inflation
that's going to decrease the aggregate
supply so up to this point we've been
talking about the short-run aggregate
supply but there's also a long-run
address is vertical not to learn about
this you don't watch the next video till
next time
mr. Clifford welcome to ac/dc econ today
I'm going to learn about aggregate
supply the Agora supply curve is going
to show you the production of everything
inside the entire country it's not like
the market supply it's not the supply of
one product its supply of all products
so right here we have the price level
down here we have the real GDP produced
and we have an upward sloping short-run
aggregate supply curve so when the price
level increases producers will produce
more output like the market supply curve
this curve can shift an increase is to
the right and it decreases to the left
so there's a bunch of things will shift
this curve things like key resources so
there's an increase in the price of oil
or steel or labor and that would
definitely change the amount we can
produce another shifter would be
productivity if there's an increase in
machines and technology or just
machinery and capital stock then this
admin supply curve would shift to the
right because we can produce more
another shifter might be some sort of
government action that affects producers
like taxes or subsidies I've got four
scenarios right here I want you to
figure out which ones will increase or
decrease a grits supply so go down the
line pause the video and see how you do
an increase in nominal wages would mean
producers can't produce as much because
there's an increase in the price of a
key resource labor so the address supply
curve would shift to the left an
increase in physical capital means we
have more tools and more machinery and
so the address supply curve would shift
to the right because we can produce more
a significant decrease in corporate
taxes means producers would have more
money to produce more and so that would
shift the aggregate supply to the right
and for the last one if everyone expects
higher inflation in the future this is
going to decrease the aggregate supply
because business is going to have their
workers come to them and demand higher
wages because they expect higher prices
so if we expect an increase in inflation
that's going to decrease the aggregate
supply so up to this point we've been
talking about the short-run aggregate
supply but there's also a long-run
address is vertical not to learn about
this you don't watch the next video till
next time
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Sep 03, 2025
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