what Is the components of aggregate supply?
Answers
Answer:
- Total goods produced at a specific price point for a particular period are aggregate supply.
- Short-term changes in aggregate supply are impacted most significantly by increases or decreases in demand.
- Long-term changes in aggregate supply are impacted most significantly by new technology or other changes in an industry.
Answer:
Aggregate supply is the money value of total output available in the economy for purchase during a given period. When expressed.
In physical terms, aggregate supply refers to the total production of goods and services in an economy. It is assumed that in short run, prices of goods do not change and elasticity of supply is infinite.At the given price level, output can be increased till all resources are fully employed.
If we go deep, we will find that aggregate supply is represented by national income. How? We know that the money value of final output is distributed as rent, wages, interest and profit among factors of production which help to produce the output. From producers’ point of view, it is the cost of producing goods and services which they must recover from sale of output; otherwise, they will not produce the output.
Since the sum of factor incomes (rent, wages, interest and profit) at national level is called national income, therefore, aggregate supply (AS), output and national income are same. Alternatively, AS = Y where Y is national income. Thus, income or total output measures the aggregate supply of goods and services.
Explanation:
Hope it will help you..