Explanation The economy’s potential output can change through 1. Improvement in technology 2. More skilled workers 3. Amount of Capital. A shift in the aggregate demand curve can affect the aggregate supply only in the short run, but it will have no impact in the long run. In the long-run aggregate supply curve is only affected by events that change the potential output of the economy. A temporary change in aggregate supply happens only in the short run and has no effect in the long run. So change in aggregate demand have no impact on potential output. The aggregate supply curve shows how much output is supplied by firms at different price levels...

6th Edition

ISBN: 9781337408745

Author: William A. McEachern

Publisher: Cengage Learning

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Question

Chapter 10, Problem 5P

To determine

The factors that change the aggregate supply.

Introduction:

Aggregate demand: Aggregate demand is the total amount of final goods and services demanded in the economy in a particular time period.

Aggregate Supply: Aggregate supply is the total amount of goods and services available in the economy of sell in a particular time period.

Expert Solution & Answer

Chapter 10 Solutions

Econ Macro (book Only)

Ch. 10 - Prob. 1P Ch. 10 - Prob. 2P Ch. 10 - Prob. 3P Ch. 10 - Prob. 4P Ch. 10 - Prob. 5P Ch. 10 - Prob. 6P

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