What are the sources of shifts in the aggregate supply curves?

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What are the sources of shifts in the aggregate supply curves?




Answer: At the intersection of the long and short run aggregate supply curves, the price level of final goods and the expected level of input prices are equal. An increase (or decrease) in the expected level of input prices thus will cause the short run aggregate supply curve to shift up (or down) along the long run aggregate supply curve. The location of the long run aggregate supply curve is determined by the natural level of real output. An increase in natural real output resulting from improved technology or greater availability of productive resources will cause a rightward shift in the long run aggregate supply curve.

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