AP Macroeconomics Mod 2 C a Define Using Graphs As Appropriate the Short Run Aggregate Supply Sras Curve B Explain Using Graphs As Appropriate the Questions

Explain why SRAS slopes upward with sticky wages and prices and how input costs, productivity, capital, and inflation expectations shift the curve.

Exam points

explain the upward SRAS slope as output prices change faster than sticky nominal wages or input prices
identify labour contracts, menu costs, efficiency wages or misperceptions as sources of short-run stickiness
distinguish a price-level movement along SRAS from a production-cost determinant shifting the curve
predict SRAS shifts from nominal wages, oil, imported raw materials or other per-unit production costs
predict SRAS shifts from productivity, technology, physical capital or lower-cost energy

[Maximum number: 1]

The economy of Northland is in short-run equilibrium with an actual unemployment rate of 7% and an actual inflation rate of 1\%. The natural unemployment rate in Northland is 5\%.

Assume instead the government takes none of the preceding policy actions. (Northland is still in short-run equilibrium; the actual unemployment rate is 7%, the actual inflation rate is 1%, and the natural unemployment rate is 5\%.) What will happen to each of the following in the long run?

The short-run aggregate supply curve. Explain.

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AP Macroeconomics Mod 2 C a Define Using Graphs As Appropriate the Short Run Aggregate Supply Sras Curve B Explain Using Graphs As Appropriate the Questions question 1