a) What is the difference between the short-run AS curve and the long-run AS curve? Define...

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Economics

a) What is the difference between the short-run AS curve and thelong-run AS curve? Define each and explain the underlyingassumptions. What would cause each to shift either to the right orleft? b) What does the concept â€œsticky wagesâ€ refer to?Explain its implications within the AD/AS model.

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The short run AS can be defined as the amount of goods and services available in the market from the producers in the short run The SRAS curve slopes upward and shows that businesses will provide higher level of output as prices increase SRAS is primarily determined by price level and level of labor and capital The long run AS is the amount of goods and services provided by all the businesses in an economy in the long run The LRAS curve is a vertical line This means that the level of output is now independent of the price level The vertical LRAS signifies that the market has matured and the economy has reached its potential Amount of capital stock See Answer

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