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4 Cards in this Set
- Front
- Back
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Keynesian Long-Run Aggregate Supply |
They agree that a shift in AD would only increase price unless the economy is in deep recession in which increasing AD only increases output. Increasing LRAS only increases output if the economy is near full employment. |
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Withdrawals/Leakages |
Money is removed from an economySor |
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Short- Run Graph |
Both Keynesian and Classical Economists agree that in the Short Run AD will be downward sloping and AS will be upward sloping. |
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Classical Long-Run Aggregate Supply |
Classical LRAS curve is perfectly inelastic, a shift in AD would not affect National Output only price. The only way to increase output is by increasing LRAS. |
