Concept Introduction:
Aggregate Demand Curve ( AD ): It shows how
Short Run Aggregate Supply ( SRAS ): Short Run Aggregate supply curve shows the relationship between
Long Run Aggregate Supply ( LRAS ): It is a vertical curve which means it is independent of price. When price increases there is no change in quantity supplied. In the long run nominal wages are not fixed rather it can be negotiated. It shows the productive potential of the economy.
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