Answered: According to the classical economists,…

According to the classical economists, the supply curve is vertical at the level of potential GDP. What happens to the level of real output and price no matter where the demand curve is drawn?

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter18: The Keynesian Model

Section: Chapter Questions

Problem 2SQ

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Question

According to the classical economists, the supply curve is vertical at the level of potential GDP. What happens to the level of real output and price no matter where the demand curve is drawn?

Defintion Defintion Curve that represents the graphical relationship between the total supply of goods and services and the price level in the economy. When the price level increases, producers tend to supply more of a product in the market to earn a higher revenue or vice versa.

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