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2.4 What is aggregate supply (AS)?

What students need to learn:

Students should be able to:
Additional Guidance Notes
Aggregate Supply (AS)
Understand the factors influencing the amount that firms are willing to supply at various prices, for example the costs of production, the level of investment, availability of factors of production.
Students should be able to illustrate spare capacity in an economy.

Credit will be given for both Keynesian and classical approaches to AS, but this distinction will not be expected.
Movements along and shifts of the AS curve
Explain factors that might cause a shift in AS. Factors might include: changing costs of raw materials; a change in the level of international trade or exchange rates; technological advances; relative productivity changes; education and skills changes; regulation changes.
Students should be able to show the relevant shifts in the AS curve.

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