# Questions tagged [aggregate-supply]

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### Aggregate Supply derived from Wage Setting and Price setting equations

In Blanchard's Macroeconomics textbook, Aggregate Supply relation is derived from wage setting and price setting equations as such: $P = (1+m) W = (1+m)P^e F(u,z)$, which implies that an increase in ...
1 vote
25 views

### Why are sticky wages an explanation for an upward sloping SRAS curve?

I often see that the theory of sticky wages is cited as an explanation for an upward sloping short run aggregate supply curve. I understand that if aggregate demand shifts to the left, there will be ...
307 views

### Aggregation of the closure property of a production set

Consider an economy with finitely many goods $I$ and factors $F$. For each good $i$, let $Y_i \subset \mathbb R^I \times \mathbb R^F_{\geq 0}$ denote a production set for $i$. Assume each $Y_i$ has ...
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### two real gdp at the same price level in ad as model

in a macro book of arnold i see an agg demand-supply model where it seems above the equilibrium price level there are two real gdp for the same price level. the book then goes on to explain that there ...
9 views

### does the income-output-expenditure method of getting real gdp hold in ad as model

in the ad as model, it seems there's two different real gdp for a given price level when in disequilibrium. does this mean the real gdp counted from the demand side is not equal to the real gdp ...
10 views

### difference between quantity of real gdp demanded and quantity of real gdp supplied and real gdp

I can't seem to understand why the agg demand curve and agg supply curve both have real gdp at the horizontal axis and price level at the vertical axis. How can the relation between two same ...
21 views

### What would be the theoretical outcome of expansionary fiscal policy... on the business cycle?

Hello all, So, I came across this question on my economics final. It immediately struck me as odd. It's asking what effect expansionary fiscal policy would have in the Aggregate Demand - Aggregate ...
41 views

### What about the opposite of stagflation

Mankiw says that a left shift in AS leads to higher inflation and unemployment and a higher expected inflation level, which shifts AS even more left and does this continuously. I was wondering though, ...
35 views

### Why does a positive output gap shift the short run AS curve instead the demand curve?

I'm reading through Mishkin "The Economics of Money, Banking, and Financial Markets". In chapter 23 (of the global 13th edition), they introduce the AS/AD framework. What confuses me is the ...
29 views

### Is there alternative to the monetary tighetning when the inflation is caused by scarcity (supply-side shocks)?

Current economic crisis is created by sharp reducing shocks to the supply side - bad economic weather, political restrictions to the trade, service availability reduction in the transportation sector. ...
1 vote
41 views

### From the aggregate supply equation to the definition of inflation rate

By definition the inflation rate is $$\pi=\dfrac{P-P_{-1}}{P_{-1}}\cdot100\%$$ or could be defined in terms of the consumer price index CPI, but in this case I think the former is the one to consider....
1 vote