(Answered) Describe the short run aggregate supply curve and long run aggregate supply curve give two examples…

Describe the short run aggregate supply curve and long run aggregate supply curve give two examples of changes in economy that shift the LRS and the aggregate demand curve
Short-run aggregate supply (SRAS)
The short-run aggregate supply curve is upward sloping: as the overall price level rises, firms increase output because some input prices (especially nominal wages and some contract prices) are fixed or slow to adjust. In the short run, higher prices raise firms’ real profits and incentivize greater production, so output deviates from potential (natural) output.
Long-run aggregate supply (LRAS)
The long-run aggregate supply curve is vertical at the economy’s potential (full-employment) output. In the long run, all nominal variables (including wages and prices) fully adjust, so the price level does not affect the economy’s sustainable real output. LRAS represents the economy’s productive capacity determined by resources, technology, and institutions.
Two examples of changes that shift LRAS (LRS)
Technological progress
— Improvements in technology increase productivity per worker, raising potential output and shifting LRAS to the right.
Increase in factor supplies or quality
— A larger labor force, higher human capital (education/skills), or greater physical capital (investment in machinery/infrastructure) increases productive capacity and shifts LRAS to the right. Conversely, a decline in these factors shifts LRAS left.
Two examples of changes that shift the aggregate demand (AD) curve
Fiscal policy changes
— An increase in government spending or a cut in taxes raises aggregate demand (AD shifts right); spending cuts or tax increases reduce AD (shift left).
Monetary policy and interest rates
— An increase in the money supply or a policy-induced fall in interest rates stimulates investment and consumption, shifting AD right; tighter monetary policy or higher interest rates shifts AD left.