Short-Run Aggregate Supply (SRAS)
Introduced| English |
|---|
| aggregate supply/ˈæɡrɪɡeɪt səˈplaɪ/ |
| short-run aggregate supply/ʃɔːt rʌn ˈæɡrɪɡeɪt səˈplaɪ/ |
| sticky/ˈstɪki/ |
| nominal wages/ˈnɒmɪnl ˈweɪdʒɪz/ |
| input prices/ˈɪnpʊt ˈpraɪsɪz/ |
| productivity/ˌprɒdəkˈtɪvɪti/ |
| supply shocks/səˈplaɪ ʃɒks/ |
| inflationary expectations/ɪnˈfleɪʃənəri ekspɪkˈteɪʃnz/ |
| negative supply shock/ˈneɡətɪv səˈplaɪ ʃɒk/ |
What firms will produce — for now
- Aggregate demand is only half the picture; supply is the other half.
- Aggregate supply 总供给 is how much output firms will make at each price level.
- In the short run, it slopes upward — a higher price level brings more output.
- This is the short-run aggregate supply 短期总供给 (SRAS) curve.
Why SRAS slopes up: sticky wages
- In the short run, some costs are sticky 粘性 — fixed by contracts and slow to change.
- The clearest is nominal wages 名义工资, the dollar wages set in labour contracts.
- When the price level rises but wages stay locked in, profit per unit rises — so firms produce more.
- A higher price level therefore brings more output: an upward slope.
The AD-AS model
SRAS slopes up because wages are sticky in the short run. Dearer inputs shift it left (raising prices, cutting output); better productivity shifts it right.
SRAS slopes upward mainly because, in the short run:
With wages locked in, a higher price level means more profit per unit, so firms produce more.
Costs that are fixed by contracts and slow to change in the short run are called ______.
Sticky nominal wages are the key reason SRAS slopes upward.
What shifts SRAS
- Input prices 投入品价格 (wages, energy, raw materials): higher input prices shift SRAS left.
- Productivity 生产率: higher output per worker shifts SRAS right.
- Supply shocks 供给冲击 and inflationary expectations 通货膨胀预期 shift it too.
A rise in input prices (like energy) shifts SRAS:
Dearer inputs make production costlier at every price level, shifting SRAS left.
Select all that shift SRAS to the right.
Cheaper inputs, higher productivity and positive shocks raise SRAS; dearer oil shifts it left.
Higher productivity lowers the cost of each unit and shifts SRAS right.
More output per worker means cheaper production, so firms supply more at every price level.
A supply shock
- Worked idea. World oil prices double. Oil is an input for transport, plastics, and power, so costs rise across the whole economy — a negative supply shock 负面供给冲击.
- SRAS shifts left: less output is supplied at every price level.
- The price level rises and output falls at the same time.
- A positive shock (cheaper inputs) does the reverse, shifting SRAS right.
A negative supply shock (say, oil prices double) causes:
SRAS shifts left, so along AD the price level rises while output falls — a preview of stagflation.
SRAS slopes up because nominal wages are sticky — a higher price level lifts profit per unit, so firms produce more. It shifts with input prices, productivity, and supply shocks: a negative shock (dearer inputs) shifts SRAS left, raising prices while cutting output.