Question

What factors shift the short-run aggregate supply curve? Do any of these factors shift the long-run aggregate supply curve? Why?

Short answer

The short-term aggregate supply curve is influenced by price swings, changes in projected inflation, and persistent output gaps.

The short-term aggregate supply curve is any element that modifies the short-term aggregate supply curve. It does not move. The economic orientation is ephemeral and subject to change.

Step-by-step solution

Step 1. Define aggregate supply.

Aggregate supply, often known as total production, is the total amount of products and services in a given economy over a certain time period at a given overall price.

Step 2. What factors cause the short-run aggregate supply curve to shift? Do any of these factors have an effect on the long-run aggregate supply curve? Why?

Price fluctuations, changes in predicted inflation, and persistent output gaps all have an impact on the short-term aggregate supply curve. The long-term aggregate supply curve is affected by changes in total capital in the economy, accessible technologies, total labor provided by the economy, and the natural rate of unemployment. Because the economy's short-term direction is ephemeral and self-correcting, none of the factors of SRAS curve modification move the LRAS curve. This finally leads to the economy achieving long-term equilibrium.