Key Macro Diagrams: Keynesian LRAS I A-Level Economics
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Key Macro Diagrams: Keynesian LRAS I A-Level Economics
In a nutshell, the Keynesian Long-Run Aggregate Supply (LRAS) curve is horizontal at low levels of output and vertical at full employment. Horizontal section: When the economy is below full capacity (e.g. during a recession), output can increase without inflation because there are idle resources (like unemployed labor). Upward-sloping section ...
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