Keynesian Range:
- The believe in a horizontal curve because when the economy is below full employment, AD always shifts outward. when AD shifts out, increase in RGDP, unemployment drops and price level remains constant.
- Demand creates its own supply.
Intermediate Range:
- AS is between Keynesian and classical Range.
- When this occurs both GDP and Price Level increases.
Classical Range:
- In Long Run, the AS curve is vertical because the only effects of an increase in AD.
When we are already at full employment thus supply will creates its own demand.( Say's Law).
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