What is Aggregate Supply? Explain the determinants of Aggregate Supply.
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A few of the determinants are size of the labor force, input prices, technology, productivity, government regulations, business taxes and subsidies, and capital. As wages, energy, and raw material prices increase, aggregate supply decreases, all else constant.
A few of the determinants are size of the labor force, input prices, technology, productivity, government regulations, business taxes and subsidies, and capital. As wages, energy, and raw material prices increase, aggregate supply decreases, all else constant.
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Explanation:
Aggregate Supply is the money value of all finished goods and services required for a society to buy over a given period of time. It is the economy's flow of goods and services. Because the monetary value of the final goods and services is equal to the gross added value, Aggregate supply is thus the national income.
It is defined as - AS = C+S
Some of the factors of aggregate supply are labour force, commodity costs, infrastructure, productivity government regulations, corporate taxes and subsidies, and resources. Despite wages, resources and costs of raw materials increasing, total demand is decreasing, and all the others are constant.
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