Technical Analysis
The diagram to the right demonstrates a negative supply shock; The initial position is at point A, producing Y1 quantity, at P1 prices. Then there is a supply shock, this has an adverse effect on aggregate supply, the supply curve shifts left (from AS1 to AS2), while the demand curve stays in the same position. The intersection of the supply and demand curves has now moved and the equilibrium is now point B, quantity has been reduced to Y2, while prices have been increased to P2.
Read more about this topic: Supply Shock
Famous quotes containing the words technical and/or analysis:
“In effect, to follow, not to force the public inclination; to give a direction, a form, a technical dress, and a specific sanction, to the general sense of the community, is the true end of legislature.”
—Edmund Burke (1729–1797)
“Whatever else American thinkers do, they psychologize, often brilliantly. The trouble is that psychology only takes us so far. The new interest in families has its merits, but it will have done us all a disservice if it turns us away from public issues to private matters. A vision of things that has no room for the inner life is bankrupt, but a psychology without social analysis or politics is both powerless and very lonely.”
—Joseph Featherstone (20th century)