Tuesday, March 4, 2014

Ranges in AS curves


3 Ranges of As
     1.horizontal or Keynesian-includes only levels of real output that are less than full employment. Implies that the economy is in a recession
2. Vertical/classical-the economy reaches its full capacity output.
 3.intermediate-expansion of real out and price level. Actual GDP can exceed full employmeny

Aggregated model traditional


Aggregated model common

Aggregated model modern

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