Answer: The long-run aggregate supply curve, LAS, is the relationship between the price level and real GDP when real GDP equals potential GDP. The LAS curve is vertical. Along the LAS curve, both the prices of goods and services and the prices of resources, such as the money wage rate, change. The short-run aggregate supply curve, SAS, is the relationship between the price level and the quantity of real GDP supplied in the short run when the money wage rate and other resource prices are constant. The SAS curve slopes upward. Along the SAS curve, only the price level changes; the money wage rate and other resource prices are constant. The SAS curve shifts leftward when the money wage rate (or other costs) rise.
The LAS curve is the relationship between the real GDP supplied and the price level when the real wage rate changes in step with the price level to maintain full employment. The LAS curve is always vertical. The SAS curve is the relationship between real GDP supplied and price level when the money wage rate, prices of other resources, and potential GDP remain consant. The SAS curve slopes upward. In the LAS curve, both the prices of goods nad services and the prices of resources change, whikle in the SAS curve only the price level change.
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The LAS curve is the relationship between the real GDP supplied and the price level when the real wage rate changes in step with the price level to maintain full employment. The LAS curve is always vertical. The SAS curve is the relationship between real GDP supplied and price level when the money wage rate, prices of other resources, and potential GDP remain consant. The SAS curve slopes upward. In the LAS curve, both the prices of goods nad services and the prices of resources change, whikle in the SAS curve only the price level change.
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