8.The Aggregate Supply curve shows the level of real output that the business sector will produce at various possible price levels. a. Explain the Long Run Aggregate Supply curve and the assumptions that support its shape at full employment. List the assumptions, discuss the shape of the LR AS curve and why it takes that shape. b.Explain the Short Run Aggregate Supply curve and the assumptions that support its shape. List the assumptions, discuss the shape of the SR AS curve and why it takes that shape. Discuss the difference in the shape of the curve at levels below full employment GDP and what you see at levels above full-employment GDP.

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Asked Oct 28, 2019

8.The Aggregate Supply curve shows the level of real output that the business sector will produce at various possible price levels. 

a. Explain the Long Run Aggregate Supply curve and the assumptions that support its shape at full employment. List the assumptions, discuss the shape of the LR AS curve and why it takes that shape.

 

b.Explain the Short Run Aggregate Supply curve and the assumptions that support its shape. List the assumptions, discuss the shape of the SR AS curve and why it takes that shape. Discuss the difference in the shape of the curve at levels below full employment GDP and what you see at levels above full-employment GDP. 

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Long run aggregate supply shows the total planned output when both average wage rates and price level can change. Aggregate supply is a measure of a country’s potential output. The LRAS represents a point on a country’s P...

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