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Define (using graphs as appropriate) the short-run aggregate supply (SRAS) curve.

Explain (using graphs as appropriate) the slope of the SRAS curve and its determinants.

Explain (using graphs as appropriate) how movement along the SRAS curve implies a relationship between the price level (and inflation) and unemployment.

Define (using graphs as appropriate) the short run and the long run.

Define (using graphs as appropriate) the long-run aggregate supply (LRAS) curve.

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Economists use the aggregate demand–aggregate supply model to represent the relationship between the price level and aggregate output in an economy and to illustrate how output, employment, and the price level respond to macroeconomic shocks.

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The short-run aggregate supply (SRAS) curve describes the relationship between the price level and the quantity of goods and services supplied in an economy.

The SRAS curve is upward-sloping because of sticky wages and prices.

Any factor that causes production costs to change, such as a change in inflationary expectations, will cause the SRAS curve to shift.

In the long run all prices and wages are fully flexible, while in the short run some input prices are fixed. A consequence of flexible long-run prices and wages is the lack of a long-run trade-off between inflation and unemployment.

The LRAS curve corresponds to the production possibilities curve (PPC) because they both represent maximum sustainable capacity. Maximum sustainable capacity is the total output an economic system will produce over a set period of time if all resources are fully employed.

The LRAS curve is vertical at the full-employment level of output because in the long run wages and prices fully adjust.

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I have a few questions about how various factors I am thinking of could possibly impact the model. Would appreciate thoughts/opinions.
1) It seems to me that the actual mechanisms by which the money supply can increase is an important factor. For example the theoretical money supply may increase by lowering reserve requirements or prime lending rates to banks, but nothing says that the banks have to loan the extra money out into the economy, certainly not right away, so this would seem to be an automatic decrease in velocity opposing the increase in money supply. Does the model account for this, or (if true) is this something that happens even before all the effects predicted by the model begin to kick in?
2) How do excess inventories affect the short term effects of an increase in money supply? Seems that would somehow hold down inflation as well as real growth for a while.
3) In addition to profits, suppliers want to hold on to market share and maintain "goodwill" with customers, perhaps even looking ahead to when the business climate changes. Is that one of the factors that delays an increase in inflation following an increase in money supply? E.g., in a competitive market, it would seem nobody would want to be first to raise prices. But, if that is a real effect, I can't see how that would impact real growth as well, so maybe this is also just a very early effect occurring before a temporary increase in real growth kicks in?
4) Since a deliberate large increase in money supply seems to be motivated by worrisome things in the economy, it would be likely that this would almost always be accompanied by a counteracting decline in velocity since people become concerned about the future, Doing things like turning to substitutes (inferior goods) or swearing off non-necessities would accomplish this. So in reality is it possible to isolate effects of changes in money supply and changes in velocity?

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The Short-Run Aggregate Supply Curve | Marginal Revolution University

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I have a few questions about how various factors I am thinking of could possibly impact the model. Would appreciate thoughts/opinions. 1) It seems to me that the actual mechanisms by which the money supply can increase is an important factor.

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We previously discussed how economic growth depends on the combination of ideas, human and physical capital, and good institutions. The fundamental factors, at least in the long run, are not dependent on inflation. The long-run aggregate supply curve, part of the AD-AS model we've been discussing, can show us an economy's potential growth rate when all is going well.

The long-run aggregate supply curve is actually pretty simple: it's a vertical line showing an economy's potential growth rates. Combining the long-run aggregate supply curve with the aggregate demand curve can help us understand business fluctuations.

For example, while the U.S. economy grows at about 3% per year on average, it does tend to fluctuate quite a bit. What causes these fluctuations? One cause is " real shocks " that affect the fundamental factors of production. Droughts, changes to the oil supply, hurricanes, wars, technological changes, etc. can all have big and potentially far-reaching consequences.

Shocks are not all bad though! For instance, new technology can help boost economic growth. The key takeaway about real shocks is that economic growth, even in stable economies, is not smooth sailing.

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The Long-Run Aggregate Supply Curve | Marginal Revolution University

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We previously discussed how economic growth depends on the combination of ideas, human and physical capital, and good institutions. The fundamental factors, at least in the long run, are not dependent on inflation. The long-run aggregate supply curve, part of the AD-AS model we've been discussing, can show us an economy's potential growth rate when all is going well.

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1. Why do we differentiate between short run aggregate supply and long run aggregate supply?

2. Why is short run aggregate supply upward sloping?

3. What is the relationship between long run aggregate supply and the natural rate of unemployment?

4. What is the relationship between long run aggregate supply and price level?