What is a short -term aggregated offer?

A short -term aggregated offer is an economic concept that focuses on factors that affect the amount of goods and services that the economy can produce. In principle, it measures the ability of a particular economy to produce these goods and services in the short term, unlike its contrasting concept, long -term aggregated offer. Many factors can affect the short -term aggregate, also known as SRA, including the amount of demand, price changes and efficiency. SRA is measured in terms of price levels and economic income. The short -term aggregated offer assumes that prices may change, but that all other factors that affect prices and production, such as workers' wages or technologies, have not changed. The total planned production at each of these price levels will be reflected in the curve line on the graph that represents the price level and level of income. The elasticity of the curve is also important for this concept. The more elastic is the curve, the more it shows that the economy exists in the economyAdvis, unused potential that will produce more. This means that the economy can respond quickly if the aggregated demand suddenly increases.

Another way to express this elasticity is in terms of output gap, which is a gap between the actual and potential production of the economy. The more this gap is reduced and the economy is full of capacity, the less the curve becomes elastic, which means that the shortcomings of the product may occur. As the production expands, the efficiency of workers and the productivity of the machinery, which has increased the production costs affecting the SRA, can also reduce the efficiency of the production.

shifts in the short -term aggregated offer curve are possible because the assumption that all other factors are static besides prices is impossible in the real world. For example, rising costs at work would affect production costs and subsequently short -term aggregated offers. GovernmentSlaras could also close the form of higher taxation, as well as rising or decreasing raw materials such as oil used in the production of various products. Economists study changes on the curve caused by these basic factors for useful lessons about the future of the economy.