SHORT ANSWER: Explain the differences between the long run and short run aggregate supply curves. Consider these differences, and explain how an expansionary gap occurs?© BrainMass Inc. brainmass.com October 10, 2019, 1:43 am ad1c9bdddf
In main stream economics, the differences between short run aggregate supply (SRAS) and long run aggregate supply (LRAS) is as follows:
in the short run, we assume that price is fixed and output will vary. Intuitively, price of goods cannot change in a few days, but output can, by working overtime.
in the long run, output is fixed ...
LONG/SHORT RUN AGGREGATE SUPPLY