Question
Asked Dec 9, 2019
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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
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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

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

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