Aggregate Supply

Aggregate Supply refers to the total amount of goods and services that businesses in an economy are willing and able to produce at different price levels during a specific time period. It reflects the productive capacity of the economy and is influenced by factors such as labor, technology, and resources. When aggregate supply increases, it can lead to economic growth and lower prices. Conversely, if aggregate supply decreases due to factors like higher production costs or reduced workforce, it can result in inflation and economic stagnation. Understanding aggregate supply helps in analyzing economic performance and policy decisions.