Total amount of goods and services demanded in an economy at a specific point in time and at a prevailing price level.
Long-run aggregate supply is assumed to be constant in the long-run as in the long-run resources are assumed to be used optimally, leaving no potential for increasing capacity. LRAS is a vertical curve.
The business cycle period that coincides with the maximum obtainable GDP for a given point in time.
Short-run aggregate supply is assumed to maintain the positive price and quantity correlation; more can be produced through increased resource utilization, technological improvements, or other factors. SRAS is an upward sloping curve.
Refers to prices that do not easily move below threshold value even though theory would anticipate a decline to re-establish market equilibrium.
The business cycle period that coincides with the lowest GDP for a given point in time.