Friday, April 6, 2018

Unit 3: AD/AS

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Horizontal/Keynesian Range
  • A lot of unemployed resources which creates a recession or depression. It includes only levels of Real GDP that are less than the full employment output. 
Intermediate Range
  • Resources are getting closer to the full employment level which creates pressure on wages and prices. 
Classical/Vertical Range
  • Where Real GDP is at a level with unemployment at the full employment level and where any increase in demand will result only in an increase in prices 
  • The Economy is unable to produce anymore goods and services for a sustainable period of time. 


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