a) The SRAS curve

• define aggregate supply

• total supply of all goods and service in an economy at any given average price level

• state the components of a short-run aggregate supply curve

• y-axis = average price level (PL)

• x-axis = real gross domestic product (Y)

• gradient = short-run aggregate supply, constant and positive

• state what a change in only AP causes

• change in RGDP

• movement along the SRAS curve

• state how a decrease in AP affects RGDP

• state how an increase in AP affects RGDP

• RGDP increases → contraction in RGDP

• RGDP decreases → extension in RGDP

• define the determinants of SRAS

• factors other than AP that cause a change in SRAS

• state what a change in the value of the determinants of SRAS causes

• change in SRAS

• shift of the SRAS curve

• state what happens to the SRAS curve if SRAS decreases

• state what happens to the SRAS curve if SRAS increases

• shifts left

• shifts right