Short-run Aggregate Supply In the short-run, the aggregate supply curve is upward sloping because some nominal input prices are fixed and as the output rises, more production processes experience bottlenecks.
Shifts in the Short-run Aggregate Supply The short-run aggregate supply shifts in relation to changes in price level and production.
The equation used to determine the short-run aggregate supply is: Y = Y* + α(P-Pe).
The short-run curve shifts to the right the price level decreases and the GDP increases.
Changes in the quantity and quality of labor and capital also influence the short-run aggregate supply curve.
The short-run aggregate supply shifts in relation to changes in price level and production.