If aggregate supply is vertical, then which of the following statements must be true? Aggregate demand does not affect the quantity of output. Inflation creates greater social benefits. Inflation will accompany any rise in output. Aggregate demand does not cause inflationary changes in price level.
If aggregate supply is vertical, then which of the following statements must be true?
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Aggregate |
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Inflation creates greater social benefits. |
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Inflation will accompany any rise in output. |
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Aggregate demand does not cause inflationary changes in price level. |
Aggregate Demand(AD) and Aggregate Supply(AS)
A macroeconomic model known as the aggregate demand-aggregate supply model uses the link between AD and AS to explain price level and production. AD and AS relates to supply and demand as it is used in macroeconomics. Both aggregate supply and aggregate demand are plotted in relation to the overall level of prices in a country and the overall volume of products and services traded at a given price.
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