Aggregate supply definitions The short-run aggregate supply curve shows How firms respond to changes in interest rates Changes in output in an economy as the price level changes, holding all other determinants of real GDP constant O The relationship between the price level and aggregate expenditure What happens to output in an economy when the government spends more money Which of the following are assumed to remain unchanged along a given short-run aggregate supply curve? Check all that apply. Institutions, such as patent laws and tax systems, that make up the "rules of the game" Real GDP The technology available to firms The price level The term potential output (or potential GDP) refers to: The quantity of output produced when the price level is the same as firms and workers expected when they agreed on input prices and wages The quantity of output that would be produced if every member of the labor force worked 40 hours per week The quantity of output produced at the intersection of the AD and AS curves The maximum possible output for an economy

Short run aggregate supply curve is upward sloping and it shows the relationship between the price level and output. it is upward sloping because the quantity supplied increases when the price rises. Real GDP or otherwise known as changes in aggregate demand and aggregate supply is assumed to remain unchanged because they are not caused by changes in the price level. Economic growth are one of the things that can cause change in real Gdp. Things that cause changes along a given short run supply curve can include the following: wages, increase in physical capital or advancement in technology.