Principles of Economics 2e
Solutions
Principles of Economics 2e
What is the Keynesian zone of the SRAS curve? How much is the price level likely to change in the Keynesian zone?
Keynesian zone of SRAS curve is to be determined.
It is usually to the left side of AS curve. With the intersection of AS curve and AD curve, Equilibrium Ekis attained. But it should be noted that as Keynesian Supply curve is nearly horizontal, any shift in Aggregate Demand Curve will affect Real GDP significantly or proportionately higher compared to change in price level...
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