AS curve

• What is aggregate supply?

  volume of goods and services produced within the economy at a given price level.
• what does AS suggest?

  ability of an economy to produce goods and services
• what does AS show?

  relationship between the real GDP and the average price levels. 
• Why is AS upwards sloping?

  
  

  • As real output increases, firms spend more to increase production e.g. wage bills will increase
  • Increased costs =higher average prices