AP Macroeconomics Flashcards: Short-Run Aggregate Supply (SRAS)
Written by AP Content Team, Verified for 2026 AP Exams, Last updated: May 2026
Review key ideas with interactive flashcards. This set includes 11 cards to help you master important concepts.
If the overall price level rises but wages remain 'sticky', what happens to the quantity of goods and services supplied?
When the price level rises and wages are sticky, firms' profits increase, creating an incentive to increase the quantity of goods and services they supply.
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If the overall price level rises but wages remain 'sticky', what happens to the quantity of goods and services supplied?
When the price level rises and wages are sticky, firms' profits increase, creating an incentive to increase the quantity of goods and services they supply.
What is the relationship between the price level and unemployment when moving along the SRAS curve?
Moving up along the SRAS curve, a higher price level is associated with higher output and employment, which leads to lower unemployment.
What is the slope of the SRAS curve and why?
The SRAS curve is upward-sloping because of sticky wages and prices, meaning input costs do not immediately rise with the price level, making it profitable to produce more.
What causes the SRAS curve to shift?
Any factor that causes production costs to change will cause the SRAS curve to shift, such as a change in inflationary expectations or resource prices.
What does a movement *along* the SRAS curve signify?
A movement along the SRAS curve shows the change in the quantity of output supplied that results from a change in the overall price level.
What are the determinants of the SRAS curve?
The determinants of the SRAS curve are factors that change the costs of production, such as inflationary expectations, input prices, productivity, and government policies.
What is the short-run aggregate supply (SRAS) curve?
The SRAS curve describes the relationship between the price level and the quantity of goods and services that firms are willing and able to supply in an economy.
What does the term 'sticky wages' refer to in macroeconomics?
Sticky wages are nominal wages that are slow to adjust to changing economic conditions, such as a change in the overall price level.
What is the short-run trade-off between inflation and unemployment?
This is the inverse relationship where a higher inflation rate (price level) is associated with a lower unemployment rate in the short run, as implied by the upward-sloping SRAS curve.
How does an increase in output along the SRAS curve affect employment?
To increase output, firms must hire more workers, which leads to a corresponding rise in employment.
If inflationary expectations rise, how does this affect the SRAS curve?
An increase in inflationary expectations raises production costs (as workers demand higher wages), causing the SRAS curve to shift to the left.