Aggregate Supply (SRAS)

Definition

The aggregate supply curve represents the total quantity of goods and services that firms are willing and able to produce at different price levels in an economy. It shows the relationship between the price level and the real output (GDP) produced by firms.

Related terms

Aggregate Demand (AD): The total quantity of goods and services demanded in an economy at different price levels.

Long-run Aggregate Supply (LRAS): Represents the maximum potential output an economy can produce when all resources are fully utilized.

Sticky Wages: When wages do not adjust quickly to changes in prices or demand, leading to temporary imbalances in labor markets.