Module 18 Featured Worksheet

Aggregate Supply

1. Explain the slope of the SRAS.

2. Graph the following scenarios.

a. Worldwide oil and gas prices increase 30%.

b. The nation's expectation of inflation falls by 5%.

c. The nation passes very new strict EPA laws affecting almost all firms.

d. Due to a long recession, workers accept lower nominal wages.

3. Explain the slope of the LRAS curve.

4. Graph an increase in potential output from $18 trillion to $20 trillion.