Investor Glossary-aggregate supply curveInvestor Glossary-aggregate supply curveInvestor Glossary-aggregate supply curveInvestor Glossary-aggregate supply curveInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Aggregate Supply Curve

The HTML to link to this page
 

The aggregate supply curve is a concept from economics that symbolizes all of the goods and services an economy produces in a given time period. Either a vertical line (i.e. long run aggregate supply curve or LRAS) or a line slopping upward from left to right (i.e. short run aggregate supply curve or SRAS) pictorially represents the aggregate supply curve. Every point on an aggregate supply curve corresponds to a particular level of output at a particular price. Output is plotted on the x-axis of the aggregate supply curve, price on the y-axis. An upward-slopping aggregate supply curve thus signifies that as prices rise, businesses are willing to produce more, while a vertical aggregate supply curve signifies that output will be the same regardless of price. Several factors contribute to determining the position of the aggregate supply curve, including labor supply, quantity and quality of capital stock, resource productivity, innovation, producers subsidies and taxes, and a shift in inflation expectations. A shift to the right in the aggregate supply curve signifies such events as a decrease in overall production costs (e.g. decrease in labor costs, technological innovation, subsidies, etc.). On the other hand, a shift to the left in the aggregate supply curve signifies an increase in production costs (e.g. higher wage costs, higher producer taxes, etc.). Prices may move the aggregate supply curve in the short run, but in the long run only resource availability and resource productivity affect the aggregate supply curve.



Rate this aggregate supply curve definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: reverse mortgage, diluted share, stock market close, VIX, option premium, 401a, per diem, labor relations, deferred tax, inflation, current ratio, EBITDA, limit order, APR, retained earnings, balance sheet, wholly-owned subsidiary, phantom income, 1031 exchange, average price per share, class C shares, LIBOR, deferred revenue, in escrow, command economy, quality assurance, real GDP, covered put, Zero Cost Collar, minority interest, open position, Key Rate Duration, margin rate, ex-dividend, cancelled check, FICO score, stock split, liquidity ratio, 1035 exchange, dividends payable, 144a, annual return, FTSE, debt service coverage, implied volatility, risk management, irrevocable trust, required rate of return, ex-dividend date


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Investor Glossary | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use