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LONG/SHORT RUN AGGREGATE SUPPLY

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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?

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LONG/SHORT RUN AGGREGATE SUPPLY

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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 ...

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