An Introduction to Aggregate Supply

The Aggregate Supply curve is one of the more complicated concepts in Macroeconomics. This video explains the theories behind the short-run and the long-run AS curves, and shows how a nation's economy will respond to a change in aggregate demand in both the fixed-wage and the flexible-wage periods.
Want to learn more about economics, or just be ready for an upcoming quiz, test or end of year exam? Jason Welker is available for tutoring, IB internal assessment and extended essay support, and other services to support economics students and teachers. Learn more here! econclassroom.c...

[@salooomsamra6711]

You are better than my macroeconomic professor, I hope we have professors like you in my University. Btw, I'm an engineering student and I was able to understand every single point in this video, you have a really effective and organized way to teach a concept even if the student does not have a background about it. Thank you, # RESPECT

[@harryarmstrong2002]

Only video on the whole of KZbin that managed to explain this concept to me clearly

[@theamateur6731]

Your teaching makes concepts crystal clear, even better than jacob Clifford and khan academy! Thanks a trillion!

[@msbbenin6693]

Jason, i would love to see your face as i don't think that picture there is you. Please put a face to this fantastic tutorial. I'm so addicted to your tutorials. I don't attend econ lectures anymore as i never get what my proffessor is on about but you make it pleasant to for students to follow, you tell it like a soap story line. I've learned alot. Thank you so much.

[@JasonWelker]

Well, that is me... So there you go!

[@imskkhannalivelifefullest]

THANKS ALOT FOR HELPING THROUGH THIS VIDEO. I AM GLAD I CAME ACROSS THIS, IT HELPED ME GET A REALLY GOOD MARK ON MY FINAL! THANKSSSSSSSSSSSSSSSSSSS A TON

[@osburgachandrikanicholas3376]

Thanks

[@taewill1514]

i am a macroeconomics student in the caribbean and everything just seemed like a new language until now. Thank you so much. i almost gave up.

[@joshuaarulnayagam4994]

give up

[@YDC117]

@@joshuaarulnayagam4994 lol

[@CezarSaid]

you are better than my Professor, Thank you.

[@AsianDramaQueen13]

Thank you so much. It's very easy to understand. Much better than my econ teacher at least :) xx

[@cavesloth]

This is the best video I could find which explains this. Thanks

[@keckelma]

3 hours until my macroecon final... I think this video just bumped up my grade 10%. I'm pretty sure college will be obsolete in the future as people realize the quality of instruction on KZbin is often superior to a 300 person lecture hall.

[@BUBALAJOLIE5]

i love ur videos so much.....so easy to understand....ur great....after my lecture i always come here.....

[@chesterin2811]

THANK YOU SO MUCH, after watching you video I have a clear understanding of the subject.

[@fangfeixu5113]

It is been good!!! I love Economics.

[@Gstyliie]

Im loving this..its giving me a productive hour for my brain..but you dint finish tho..is there a part 2 or something..i need to know abwt the long run

[@caribbeanqueen1389]

thank you. you have helped clear up the confusion. i wished that u had addressed interest rates and contractionary policies though

[@patriotsfanmets]

Thank you for posting this video, ill def be checking out your other macro videos after I take this test im cramming for :p

[@sammystaxs285]

Man this helped, Please keep making your video....Macro exam tomorrow :D

[@StateCrime]

Please, more playlists. Great videos.

[@DrSwagMeOut]

This was extremely thorough thank you so much.

[@einzeltier]

Well done! Still, this is just an explanation for the neoclassical approach. Is the keynesian approach not being taught in the states?

[@polvotierno]

In the income measure of GDP, you mentioned that there were other forms of income besides wages... profit, rent and interest on capital. Couldn't one of these other forms of income decrease instead of wages to come back to LRAS? In the present recession, business profits are up, but there is pressure to lower wages. How could the economy return to LRAS, if profits are rising? Would there be any need to lower wages in this case?

[@alexkimani378]

awesome videos nice work guys

[@FilmStudio6]

What is the software you're using for your demonstrations? It seems like a useful software, it might be something my teacher may want to use.

[@MrArvidG]

Thank you, very clear explanation!

[@aqcaBIG]

This is just so helpful, thank you so much sir!

[@mohamedgaber3982]

Many thanks Jason really i enjoyed with your vedios

[@terry198532]

this helps a lot, many thanks

[@sydneyjacobs3776]

Thanks a lot, this video helped. Can you please explain wage setting and price setting because I find it really difficult to grasp the concept.

[@msbbenin6693]

Many thanks Jason. I believe you now. Gorgeous !!

[@luisgentil]

Let me try to answer that: The full employment level, in a supply/demand curve for labor, is the equilibrium quantity of labor in the production that matches what firms are willing to pay for labor with what workers are willing to earn. An increase in aggregate demand will increase the demand for labor, which is the marginal benefit for firms to employ more labor, so firms will be willing to spend more with hirings. They will simply hire workers who couldn't supply the marginal benefit before.

[@vassilikikazepi2620]

great explanation! thanks a lot!

[@gzbaexxi5238]

Thanks a lot!! Really big help (y)

[@henokdosa4662]

nice man thank you!!!

[@katalyst552]

whoaaa that was amazing! that was understandable!

[@LucisFerre1]

Falling demand is also caused by falling consumption of goods and services.

[@0936amjd]

Whats the song at the beginning???

[@lishaohlisha]

This helped alot! Thank you :)

[@MsKillersexy]

i wish you taught at my school!

What's the name of the software he uses to draw all of these?

[@xiaomann]

Thank you so much!

[@mrslivestrong99]

im in AP econ and you are a life saver ! xoxo prom? - daniel

[@pinki123666]

What makes people stop investing in the first place if fallen demand is caused by lack of investments? 4:21

[@tphillipoff]

If aggregate demand fell and wages somehow WEREN'T sticky, why would output still remain the same? In a normal supply and demand graph, a leftward shift of the demand curve always reduces the quantity supplied.

[@JasonWelker]

Output will fall if if wages are sticky and demand falls. Only when wages have adjusted to the lower level of demand does output return to its full employment level.

[@donnarabino5726]

what is the foundation of aggregate supply?

[@cutekitten1056]

Thank u may got bless u 😭😭😭

[@okakodjamboleka1995]

thank you

[@whosvanessaa5710]

I have a quiz tomorrow and omi lord I don't get it but this video it's kinda working but it's just that this subject it's not for me and i wish I could understand it better but my brain it just doesn't work with it , someone help me

[@Civsuccess2]

You guys see that Keynesian belief of increasing demand will result in inflation in a long run. This inflation will only happen when there's full employment. In another word, in the current economy situation when there's high unemployment. Firms will keep stick to the SRAS by hiring those unemployed people (since they are cheaper) until full employment. Then, LRAS will take over causing inflation.

[@sammiesylau]

This saves me

[@mrslivestrong99]

great vid ! :$

[@LucisFerre1]

I wonder how in the long run, wages are supposed to fall when labor unions rates have dramatically increased in the private (government) sector and has fallen from about 50% in the 1940's to about 8% of jobs today in the private sector, and where government PROTECTS labor interests. Not only is the current administration following failed demand side policies (in a deep recession, aggregate demand curve is inelastic), but also policies that are actively hostile to supply-side economic views.

[@raghavmundhra5130]

how can a country have trade deficit and a surplus at the same time

[@lordelm3lmeen]

But the model suggests that an economy can only grow for a small period of time before returning to its level. Then how come economies have a GDP growth rate? Because it seems obvious that the full employment level of the US in 1955 changed by 1995. But the model seems to suggest it doesn't ever change.

[@thelstan8562]

very helpful！！

[@vidul7498]

Where is the video on why the short run aggregate supply curve bows out?

[@JasonWelker]

Check out the playlist, it's the next video.

[@Dan-fx1sg]

Hello, i only see two videos..... introduction to AD and AS for 2.2.

[@mcw0805]

I understand it now! But holy shit, you talk fast

[@Arianeful]

I thought there was an intermediate AS curve?

[@madueke]

cram!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[@TheMrCatDogRabbit]

Have the same confusion here mate.

[@Civsuccess2]

Over all, there's inflation, however, it's a good inflation. This inflation is due to people competing with each other to ask for wage increase. It's coming from trickle up economics.

[@ConfusedDuck1]

word.

[@BUBALAJOLIE5]

biggest fun of you....

[@Monkeymahenmiester]

wtf