AP Macroeconomics 3.3: Short-Run Aggregate Supply
Explain why SRAS slopes upward with sticky wages and prices and how input costs and inflation expectations shift the curve.
- Syllabus
- Effective Fall 2025
- Course
- 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… question 1
[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.
(i) State that the short-run aggregate supply curve will shift to the right and explain that 1 point input prices (e.g., nominal wages) and/or inflationary expectations will decrease.
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