Macro 3.3 &3.4 - Aggregate Supply Short Run and Long Run

This video covers topic 3.3 & 3.4 of the AP Macroeconomics Course Exam Description (CED). This video is all about Aggregate Supply. It covers Short Run Aggregate Supply (SRAS), Long Run Aggregate Supply (LRAS), Sticky Wages, Flexible Wages, SRAS Shifters, and LRAS Shifters.
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[@opossum4722]

this channel is literally the only reason i’m passing econ

[@ReviewEcon]

I'm glad to have helped! 😅
Good luck on your exams!

[@ryanjiang1376]

Bro's a walking W

[@ReviewEcon]

You're too kind! Thank you! 😄

[@myplace571]

i didnt really grasp the third shifter "inflation expectation" does that mean higher inflation shifts SRAS to the right?

[@ReviewEcon]

Higher inflation expectations means workers demand higher wages and resource owners start demanding higher prices too (on the expectation they will need higher prices to meet their expenses). Those higher input costs shipped the short run aggregate supply curve to the left.
Higher inflation expectations shift the SRAS to the left and lower inflation expectations expectations. Shift the SRAS to the right.
I hope that helps!

[@myplace571]

this clearly explains it, thank you always@@ReviewEcon

[@bindusimon2211]

could you make a simplified version of this video im confused

[@ReviewEcon]

Here's a simplified article about the AS/AD model that might help.
www.reviewecon.com/asad-model1
I also cover this in a more simplified way in my until 3 Sunday video:
th-cam.com/video/jxrGlPas9xc/w-d-xo.htmlsi=FcJZIlZJZ_btmOGX
If those don't help, you may want to search out other resources. If you have specific questions, please let me know! Good luck!

[@potofcandies]

Is the short run aggregate supply curve that I see in my notes that starts out relatively flat then curves upwards describing the same relationship between gen price level and real national output and if so, why are there 2 SRAS curves? o.o

[@ReviewEcon]

Yes, some textbooks have 3 ranges of the SRAS curve. First, the Keynesian range (at low rGDP) is a horizontal section where increasing real GDP does not cause an increase in the price level. The middle range of the SRAS (all you see in the model I use), is upward sloping, so increases in real GDP will cause increases in the price level. Finally, you get to a classical range (vertical at high rGDP) where increases in real GDP aren't possible and increases in Aggregate demand (when you add it) will only cause an increase in the price level.
I hope that helps!

[@ReviewEcon]

The mainstream model includes both a short run curve and long run curve because in the short run real output can increase (up to a point) with price level increases. But in the long run (you'll find out why in the 3.7 video), the economy will always produce the rGDP output that correlates to full employment.
Good luck with your studies!