1. Aggregate Supply and the Aggregate Supply Curves (m: Explanations should be brief, accurate and clear. Copying the text from the lecture slides is not allowed!). (a) Dene aggregate supply. (b) What relation reects the aggregate supply curve? (c) What is the shape of the long-run aggregate supply (LRAS) curve? Explain why. (d) Why the short-run aggregate supply (SRAS) curve can have a positive slope? Give a standard explanation (e) Identify, which of the following events will shift the short-run aggregate supply curve, the long-run aggregate supply curve or both curves and in what direction and give short explanations. (i) There is an increase in the prices of raw materials. (ii) Government implements an investment tax credit. (iii) Government decreases the personal income taxes. (iv) Government increases the size of unemployment benets; (v) There is a decrease in the tax rate on interest income from household savings. (vi) The Central bank increases the supply of money. (vii) The trade unions power in the labour market falls. (viii) Economic agents increase their inationary expectations; (ix) A technological advance appears in the economy. (x) The average skill level of the labour force falls. Put your answers in the following table. I SRAS curve a.\