Concept Introduction:
Inflation: It is defined as the continuous rise in
Aggregate Demand Curve ( AD ): It shows how price and the quantity demanded are related to each other. The curve is negatively slopped which means that when prices rise the quantity demanded falls.
Short Run Aggregate Supply ( SRAS ): It is a positively slopped curve in which supply increases when price rises.
Long Run Aggregate Supply ( LRAS ): It is a vertical curve which is independent of time. When price increases there is no change in quantity supplied.
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