Unit 3 - Feb 21 (Ranges of AS)

3 Ranges of AS

1. Horizontal/Keynesian - includes only level of real output, that are less than full employment. Implies that economy is in a recession.
2. Vertical/Classical - the economy reaches its full capacity full output. Increase in price level equal to constant production.
3. Intermediate - expansion of real output and price level. Actual GDP can actually exceed full employment.