Kokonaisvarantoa

Kokonaisvarantoa, meaning total reserve or aggregate supply in English, is an economic term referring to the total amount of goods and services that all firms in an economy plan to sell at a given price level. It represents the economy's capacity to produce output. The aggregate supply curve shows the relationship between the price level and the quantity of output firms are willing to supply. In the short run, the aggregate supply curve is typically upward sloping because some input prices, such as wages, are sticky and do not immediately adjust to changes in the price level. This means that as the overall price level rises, firms find it profitable to produce more.

In contrast, the long-run aggregate supply curve is usually depicted as vertical. This is because, in the long run, all input prices are assumed to be fully flexible and adjust to changes in the price level. Consequently, the economy's output is determined by its available resources, technology, and capital stock, rather than the price level itself. Factors that can shift the aggregate supply curve include changes in the cost of production, such as wages, raw material prices, and energy costs, as well as technological advancements, changes in government regulations, and the availability of natural resources. An increase in any of these factors would shift the aggregate supply curve to the right, indicating a higher output at any given price level. Conversely, a decrease would shift it to the left.