MacroEconomics: Plzzzz help...Aggregate supply

[itsmedipti]

Could anyone explain me the basic concept of aggregate supply in short run and long run. I am not able to understand the Keynesian and classical approach.

 

[passion hunter]

in short run production can only be increased by altering variable factors of production.....which mean when price changes producers can not respond effectively...this makes supply inelastic.....in long run production can be altered by employing more of all factors of production...thus manufacturers can be responsive to price changes


keynesian supply curve is horizontal initially and then becomes vertical which shows that when economy is below the full employment level of output....that is when economy is in recession resources are freely available and production can be increased without any price rises....as more and more resources are employed ...there is scarcity and lack of spare capacity thus price change can not elicit a rise in output....supply would than be perfectly inelastic