ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Definition: The short-run aggregate supply (SRAS) curve shows the relationship between the aggregate price level and the quantity of aggre-gate output supplied that exists in the short run, the period when many production costs can be taken as fixed.

Detailed explanation-2: -In the most general sense (and assuming ceteris paribus conditions), an increase in aggregate demand corresponds with an increase in the price level; conversely, a decrease in aggregate demand corresponds with a lower price level.

Detailed explanation-3: -The aggregate demand curve shows the relationship between the aggregate price level and the quantity of aggregate output demanded by households, businesses, the government, and the rest of the world.

Detailed explanation-4: -The aggregate demand/aggregate supply model is a model that shows what determines total supply or total demand for the economy and how total demand and total supply interact at the macroeconomic level. Aggregate supply is the total quantity of output firms will produce and sell-in other words, the real GDP.