Alright. So now let's see the different things that can affect our short-run aggregate supply and cause it to shift right or to the left. Now in the top table, it should look familiar to what we saw with long-run aggregate supply. These are factors of production. The availability of factors of production resources is going to affect us in the short run as well as in the long run. So you can imagine if there's an influx of labor into the economy, that's going to shift us to the right in the short run but also affect the long run because there's more availability of resources, right? So, in this top graph, it's very similar to what we see in the long run and both of those curves are going to be affected by these types of ideas. So labor, if we have, you know, again immigration into the country, immigration to the US. So this would shift us to the right. Right? A good example. Something that's increasing the supply in the short run and a bad would shift it to the left. So, immigration to the US would increase it just like before. And immigration from the US, well, let's do a different example here. What about something with the natural rate of unemployment? If the rate of unemployment goes up, well, that would be bad, right? Because there's less labor available. If the rate of unemployment increases, well, there's less labor available so that would decrease our short-run aggregate supply.
How about physical and human capital? Now, I lump these together because if there's just more of it, it's a good thing. If there's less, it's a bad thing, right? More physical capital, more human capital, people being smarter, That's a good thing and it'll shift us to the right. How about natural resources? Again, this is something where if we have more natural resources, it's going to shift us to the right and less is going to shift us to the left. Right? We have a new oil reserve. We've started using some new protected land that had a bunch of trees on it and now all of a sudden we can chop them down. Well, that would be good for our short-run aggregate supply. And technology, again, whenever there's new technology, this is going to be good. And a bad example, well, again with technology, we generally just see increases. It's hard to have decreases in technology. But it would have to be some sort of catastrophe that would be decreasing our technology in general. Alright? So those are our factors of production. Very similar to what affects our long-run aggregate supply curve. Curve. But in the short run, there are also expectations. Expectations are also going to be affecting our curve here. So if we have expectations of the future price level, so this isn't the current price level. If we think the price level is going to change in the future, so now firms are saying, we see price levels our analysis looks like it's going to increase in the future. Well, that's a good thing. They're going to start producing more to be able to meet that demand at those higher prices. They want they wanna be able to produce more to have enough ready to meet those higher prices. Right? So that would be an increase to the short-run aggregate supply when they expect higher future price levels because it means higher profit with higher prices.
And it'll be a shift to the left if they expect future price levels to decrease. Now, a supply shock. A supply shock, well, this is an unexpected event. So this is an unexpected thing that happens. So maybe we unexpectedly find some new key resource, right? Some oil deposit. Find an oil deposit. Well, that could be a good thing for our aggregate supply, right? Because many businesses use oil and now there's more available which brings down the prices of oil and it'll shift to the right, right? It brings down the cost for the economy or if there's some sort of loss of a key resource or spike in the price, right? Some sort of scarcity. Scarcity. That would be a bad thing, right? So this is an unexpected event that's going to affect us immediately in the short run.
And finally, an adjustment for past expectations. So maybe we had some expectation in the past about the future price level, right? So in the past, this is going to be the opposite of our current expectations. So maybe in the past, we expected the price levels to decrease, right? So we had shifted to the left. Our short-run aggregate supply had shifted to the left. There was less production because of the lower expected price but then the price didn't lower as much. So now, we're adjusting back up. So, unfound lower price expectations would shift us back to the right because previously, we had shifted to the left, right? This would have shifted us to the left and now we're shifting back to the right when those previous expectations weren't met. So this is when other when previous expectations aren't met. And this would be unfound higher prices, right? Because we had previously increased our production and now we're adjusting for what actually happened. Okay? Would shift us back to the left. So these are things that could shift our short-run aggregate supply. Let's go ahead and see how all of this works together. Let's do.