March 3, 2014

Ranges in AS Curve

3 Ranges in AS Curve

  1. Horizontal / Keynesian range: includes only levels of real output that are LESS than full employment output; implies than an economy is in RECESSION
  2. Vertical / Classical range: the economy reaches it's FULL CAPACITY of real output; increase in price level is EQUAL to constant production
  3. Intermediate range: EXPANSION of real output and price level; actual GDP can EXCEED full employment
Aggregate Model (Traditional)

Aggregate Model (Common)
Aggregate Model (Modern)
-Situations for AD/AS Changes:


-Practice:





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1 comment:

  1. UnknownMarch 3, 2014 at 9:36 PM

    I liked how you've color coded everything, making the main points stand out from the rest. Also, your examples of what causes the as or ad to shift helped!

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