Short-Run Aggregate Supply (SRAS) Curve

Definition

The SRAS curve shows the relationship between real GDP produced and price levels in an economy in the short run when resource prices are fixed. It depicts how businesses respond to changes in demand by adjusting their production levels while keeping input costs constant.

Related terms

Long-Run Aggregate Supply (LRAS) Curve: The LRAS curve represents the relationship between real GDP produced and price levels in an economy when all input costs can vary.

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

Sticky Wages: A concept that suggests wages do not adjust immediately to changes in economic conditions, leading to short-run fluctuations in employment and output.