Page 43 - FINAL CFA I SLIDES JUNE 2019 DAY 5
P. 43
Session Unit 4:
16. Aggregate Output, Prices & Economic Growth, p.52
LOS 16.g: Explain the aggregate supply curve in the short run and long run., p. 61
Think factors of production/
constraints!
LRAS: Wages and other input prices change proportionally to the
price level, so the price level has no effect on aggregate supply
SRAS: Some input prices will
change as we try to expand,
consistent with price increase
from AD change
If AD changes in the VSR, VSRAS/Output
will adjust without changing price via
labor hours and sweating plant and
equipment to respond to AD changes.
