2.3.1 Characteristics of Aggregate Supply

• Define Aggregate Supply (AS)

  The total of all goods and services produced in an economy each year
• Define Short-run Aggregate Supply (SRAS)

  The total planned output when the price level can change but the prices and productivity of factor inputs are held constant.
• Define Long-run aggregate supply (LRAS)

  The total planned output when both prices and average wage rates can change. It is a measure of the country's productive potential