44. The determinants of aggregate supply Group of answer choices a. are consumption, investment, government, and...

44. The determinants of aggregate supply

Group of answer choices

a. are consumption, investment, government, and net export spending.

b. explain why real domestic output and the price level are directly related.

c. explain the three distinct ranges of the aggregate supply curve.

3, include resource prices and resource productivity.

Solutions

Expert Solution

Aggregate supply is the total supply of goods and services available to a particular market from producers.

The main determinants of aggregate supply are:

1.Wages: This is the price of labor, which works through the resource price determinant. It is the key determinant underlying the self-correction mechanism of the aggregate market.

2.Technology: Improvements in production techniques, often embodied in product inventions and innovations, is a prime example of a resource quality determinant.

3.Energy Prices: These are the prices of key energy inputs, especially petroleum, that are essential to any modern industrialized economy. Like wages, energy prices also work through the resource price determinant

4.Capital Stock: This is the total quantity of capital used by the economy for production. It is a prime example of a resource quantity determinant and affects both the short-run and long-run aggregate supply.

Other determinants of aggregate supply include education, population growth, labor-force participation, resource exploration, and assorted material input prices.

Hence they include the resource price and their productivity .

Hence (4) part is a correct answer

Rahul Sunny answered 1 year ago

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