Therefore the aim is to develop a mainstream model which comprehensively addresses aggregate supply.
The real wage has a negative effect on firms' employment of labor and hence on aggregate supply.
In this section we present a formal statement of the simplified rational expectations aggregate supply and demand model discussed above.
There are generally three forms of aggregate supply (AS).
Nevertheless there is one area in which the Keynesian model leaves much to be desired in its treatment of aggregate supply.
The other part of the debate focuses on aggregate supply.
We will consider aggregate supply and supply-side policies in Chapters 19 and 20.
The more inelastic is aggregate supply in the economy, the greater the impact on inflation.
The hypothesis that aggregate supply depends on relative prices is central to the new classical explanation of business cycles.
On this argument, it is probable that the aggregate supply of labour will have a positive slope as shown in Fig. 2.5.
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