Economics Question

What assumptions cause the immediate-short-term aggregate supply curve to be horizontal? Why is the long-run aggregate supply curve vertical? Explain the shape of the short-run aggregate supply curve. Why is the short-run curve relatively flat to the left of the full-employment out-put and relatively steep to the right?

Question

Economics Question

What assumptions cause the immediate-short-term aggregate supply curve to be horizontal? Why is the long-run aggregate supply curve vertical? Explain the shape of the short-run aggregate supply curve. Why is the short-run curve relatively flat to the left of the full-employment out-put and relatively steep to the right?

amistre64 · Answer

i vaguely recall from economics, that government policy interferes with free market activities and causes an otherwise curvy representations to have flat spots

amistre64 · Answer

minimum wage is an example that comes to mind for an artificial flat spot ... market forces might coincide to a lesser wage, but by force of government policy, it is restricted.

also some guy whos name start with a K comes to mind,  Kinneson maybe?

austinl · Answer

Hmmm...
Thanks for your help!

amistre64 · Answer

wish it was more informative :)  just consider what types of policies may restrict the suplly side

austinl · Answer

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I wanna say that is what the short-run looks like...

amistre64 · Answer

horizontal; the sun rises over the horizon.   so a flat segment

amistre64 · Answer

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