Definition
- Movement along short-run aggregate supply
- A movement along short-run aggregate supply is the change in real GDP supplied when the price level changes while input prices stay fixed.
- Not to be confused with: Shift in short-run aggregate supply
- A shift in short-run aggregate supply means that at every price level firms supply a different quantity of real GDP, because their costs of production have changed.
Test yourself
What is the difference between movement along short-run aggregate supply and shift in short-run aggregate supply?
A shift moves the whole curve because firms' costs changed; a movement is a new point on the same curve because the price level changed.