When there is a Keynesian aggregate supply curve, an increase in aggregate demand results in proportional increase in
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JNU SIS 2013 Question 16: AD-AS model
Answer and worked solution
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AD-AS model has come up 59 times in 7 exams since 2004.
What this question tests
This question is on Keynesian and short-run aggregate supply, part of AD-AS model in Macroeconomics.
Why output responds to demand in the short run: sticky wages and prices, wage floors and upward-sloping supply.
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