Asked Dec 9, 2019
1) On the graph below, indicate and label the “Keynesian" and “Neoclassical" zones of the Aggregate
Supply curve.
Price level
Aggregate Supply
Real GDP

Image Transcriptionclose

1) On the graph below, indicate and label the “Keynesian" and “Neoclassical" zones of the Aggregate Supply curve. Price level LRAS Aggregate Supply Real GDP


Expert Answer

Step 1

Keynesian aggregate supply curve is an upward sloping curve, because, in short run the wage rate and price are less flexible. The Neoclassical aggregate supply curve is vertical.

Step 2

Keynesian, Neoclassical aggregate supply curve and its zone is shown in below figure.

Step 3

Image Transcriptionclose

LRAS ADn SRAS ADi Pn Neoclassical zone En ADk Ei Intermediate zone Pi Pk Ek Keynesian zone Yk Yi Yn Real GDP Price Level


Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in



Related Economics Q&A

Find answers to questions asked by student like you
Show more Q&A

Q: new help with homework, want to verify my anwsers are correct. In additon understanding. Thank you F...

A: The equilibrium in the economy is determined at the intersection of the demand curve and the supply ...


Q: At a student café, there are equal numbers of two types of customers with the following values. The ...

A: Marginal cost of coffee is given to be: MCc=$0.10Marginal cost of banana is given to be: MCb=$0.40Th...


Q: Suppose that new entry decreased your demand elasticity from –2 to –3 (made demand more elastic). By...

A: Initially, elasticity (E1) = -2New elasticity (E2) = -3Initial price (P1) = $10New price (P2) has to...


Q: Suppose households supply 560 billion hours of labor per year and have a tax elasticity of supply of...

A: The tax elasticity of supply is equal to 0.15.The tax rate increases by 10%.There exists an inverse ...


Q: 3 Ways in which human decisions making differs from the rational individual

A: Click to see the answer


Q: List the first ten countries in Africa with the lowest policy rates from 2008 to 2018.

A: The key lending rate of the central bank in a country is known as the policy rate. The policy rate u...


Q: Suppose we have another firm known as Sepanyan Corporation which makes a product known as Yeghias. S...

A: It is given that the Total cost of the firm is equal to $10,000 and the fixed cost is equal to $8,00...


Q: Name 10 countries with the highest policy rate and the impact of the policy rate on their economies

A: The countries having the highest policy rates as of 2019 are listed in the table


Q: know how to compare the characteristic of pure competition Monopoly, Monopolistic competition and ol...

A: Click to see the answer