What is the aggregated menu curve?
Aggregated offer (AS) is an economic term that concerns the complete supply of goods and services that companies in the national economy for a specified price level and in time. The aggregated menu curve graphically shows these relationships. The point chart uses X -axis to represent aggregated products and uses the Y -axis to represent price levels. In the short -term horizon, the price level will increase production due to increased income that manufacturers can obtain for their products. In the long run, the increase in the prices that manufacturers receive for their final products are completely compensated by the proportional increase in the costs that sellers pay for raw materials, work and capital inputs. Increasing the price level for the end products produces an increase in living costs for sellers of entry and services. Increasing the cost of living encourages the supplier to increase the prices of their entry goods and services. Wages and interest rates also have a tendenci climb. This discharge from the general price level does not happen immediately, so the sellers of final products initially enjoy greater profitability with increasing production and provide short -term aggregated supply curves that are inclined up and right.
Long -term aggregated offer curve describes the status of the economic delivery after the input costs are reset to adapt to rising prices and cost of living. This effect is an aggregated offer independent of the price level in the long run. Increasing the price of the product cannot increase revenue and create a steady point point in an aggregated offer. The long -term aggregated range of the offer is a vertical line located at the preparatory point on the horizontal axis, in which the economy fully uses all its available resources.
Two main factors shift short and long -term curves to the right or left on the X -axis. The first is to change the entryCHT. Increasing the input costs adjusts the curves to the left, reflecting a lower total offer at a given price, while the decreasing input costs move the curves to the right. For example, if the price of oil increases as a result of new government excise taxes, many end -product manufacturers that use oil or oil products as inputs will reduce their production level at all price levels due to higher costs.
Economic growth is another item that moves an aggregated menu curve. Positive economic growth is the result of investment, innovation and increase valuable resources such as work and capital. Economic growth will be acřivka to the right, reflecting higher stocks at prevailing price levels. Similarly negative economic growth due to increasing tax, technological changes and reduced investments and expenditure causes the LAS curve to move to the left. Stagflation, represented by this shift to the left, is the economic recession in which the declining level of the output also accompaniesNflation prices.