Determinants of Aggregate Supply

Aggregate here just means total. All the supply added up…equals aggregate supply.

Aggregate supply is the total supply of all the goods and services that an economy supplies. All the output of the makers or providers of haircuts and sushi dinners and massages and fancy drinks…as well as all the other stuff that gets made in an economy.

There are some things that traditionally impact aggregate supply. Supply shocks can temporarily impact it. Like if a hurricane wipes out a major oil refinery. Or if a herd of elephants runs rampant in the country's strategic peanut reserve. Or zombie apocalypse. Or rare goat disease that cuts into cheese production.

Also, productivity gains from technology can impact aggregate demand. As the economy gets better at producing things, it can make more stuff from the same amount of resources.

So if they find a way to mold cheese more efficiently...there's going to be more Roquefort to go around. Meanwhile, if they lower interest rates, you'll be able to borrow more money to buy all the high-end stinky cheese you can get your hands on.