Shifts in Aggregate Supply: Short- and Long-Term Impacts and Uncertainties

The video tutorial explores aggregate supply shifts, focusing on both short-run and long-run perspectives. Short-run shifts are influenced by changes in production costs, exemplified by oil price fluctuations, while long-run shifts depend on the quantity and quality of production factors, such as population growth. The tutorial also discusses the impact of spare capacity on these shifts, using the Keynesian aggregate supply curve as a reference. Uncertainties in the extent and duration of these shifts are highlighted, emphasizing the complexity of predicting economic outcomes.

What primarily causes long-run aggregate supply shifts?

• Changes in government policy

• Quantity and quality of production factors

• Fluctuations in consumer demand

• Variations in interest rates

What is a key factor in short-run aggregate supply shifts?

• Government regulations

• Population growth

• Cost of production factors

• Technological advancements

How might a decrease in oil prices affect short-run aggregate supply?

• It causes an outward shift

• It stabilizes the supply curve

• It causes an inward shift

• It has no effect

What is a potential long-term effect of population growth due to new births?

• Long-term increase in labor supply

• Decrease in productivity

• Immediate decrease in labor supply

• Immediate increase in labor supply

How does immigration impact the long-run aggregate supply curve?

• It causes an inward shift

• It causes an immediate outward shift

• It has no impact

• It stabilizes the supply curve

What challenge does an aging population pose to aggregate supply?

• It increases the labor force

• It reduces workforce exits

• It stabilizes the economy

• It counteracts positive impacts of immigration

What does the Keynesian aggregate supply curve illustrate about spare capacity?

• It shows immediate benefits of supply shifts

• It indicates no effect on the economy

• It highlights potential delays in benefits

• It suggests a decrease in supply