Aggregate supply
What Aggregate supply means in Economics A-Level, as defined for AQA.
Definitions of Aggregate supply
Exam boards and our study guides word this term in slightly different ways. Learn the version your board uses.
Check what you remember
Read the wording for your board, then hide it and explain Aggregate supply in your own words. Rough notes are fine. This is a self-check, with no mark or grade.
Reference: AQA
An increase in the price level incentivises firms to expand production to maximise profits, assuming short-run costs of production like wages remain constant, causing an extension along the curve.
Long-run aggregate supply is boosted more by shifting expenditure towards capital projects than by increasing current spending on welfare.
The short-run curve that shifts when a supply-side shock occurs, such as an unexpected surge in global oil prices or a natural disaster.
A curve, either short-run or long-run, whose intersection with the downward-sloping aggregate demand curve pinpoints the equilibrium.
Fluctuations in this, alongside aggregate demand, drive the boom, downturn, recession and recovery phases of the economic cycle.
The productive capacity of the economy, which fiscal policy can influence through changes in government spending and taxation.
Topics that use Aggregate supply
- Aggregate demand and aggregate supply analysis (AQA A-Level)
- Economic growth and the economic cycle (AQA A-Level)
- Fiscal policy (AQA A-Level)
Related terms
- Aggregate demand
- Macroeconomic performance
- Negative output gap
- Productive capacity
- Real national output
- Aggregate demand and supply
- Aggregate demand components
- Asset price bubbles
Using Aggregate supply in the exam
Check the command word and mark scheme for your exact question. After comparing your explanation with the reference, use the term in an answer on the linked topic. This practice does not predict an exam mark.
Practise Economics questions
Create a free account to answer exam-style questions on this topic and get feedback on your answers.
A week of Premium from your first lesson · Then the free plan continues · No card, no charge