Question

Think of the simple quantity theory of money in the AD-AS framework. In that framework, the AS curve is a.horizontal. b.upward-sloping. c.kinked at Natural Real GDP. d.vertical. e.downward-sloping.

Answer 1

In the simple quantity theory of money in the AD-AS framework, the AS curve kinked at natural real.

What is AS curve or Aggregate Supply Curve?

• The amount of real GDP that the economy produces at various price levels is represented by the aggregate supply curve.
• The methodology used to build the supply curve for all products and services is different from the methodology used to build the supply curve for individual goods and services.
• It is assumed that input prices will remain constant when calculating the supply curve for a certain good.
• The price level, however, defines the aggregate supply curve. As the price level rises, producers will be able to charge more for their goods, which will stimulate production.
• However, a price increase will also have a secondary effect that will eventually result in an increase in input prices.

To learn more about the Aggregate Supply Curve refer to:

brainly.com/question/24303271

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