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Economics A Level

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Pregunta:

Why may Keynesian Economists say the LRAS is Curved?

Autor: go kys



Respuesta:

-Low Levels of Output has AD as Elastic - Spare Capacity in the Economy. This means Output can Rise without Prices Rising. If lots of Unemployed, then Firms can get more Workers without a Significant Price Rise. -When the Curve slopes Upwards, the Economy is having Supply Problems [Bottlenecks] which increase Costs. -Curve becomes Vertical when the Economy is at Fall Capacity. AS is at point where All Resources are being Used and Output can't Increase no more


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-Low Levels of Output has AD as Elastic - Spare Capacity in the Economy. This means Output can Rise without Prices Rising. If lots of Unemployed, then Firms can get more Workers without a Significant Price Rise. 
-When the Curve slopes Upwards, the Economy is having Supply Problems [Bottlenecks] which increase Costs. 
-Curve becomes Vertical when the Economy is at Fall Capacity. AS is at point where All Resources are being Used and Output can't Increase no more
1 answer(s) in total

Autor

go kys
go kys