Some Economists Argue That at Low Levels of GDP (Lower

question 142

Essay

Some economists argue that at low levels of GDP (lower than the long-run level of output), a shift to the right in the aggregate-demand curve increases output without a significant increase in the price levels (without inflation), while at higher levels of output (above the long-run level), a shift in the aggregate-demand significantly increases the price level without much effect on output. How would an aggregate-supply curve look like according to this theory?

---

Definitions:

Car Accidents

Unforeseen events involving motor vehicles that result in damage, injury, or death.

Crystallized Intelligence

The ability to use learned knowledge and experience.

Fluid Intelligence

The ability to reason and solve new problems independently of previously acquired knowledge.

Knowledge

Information, understanding, or skill that one gets from experience or education; awareness of a fact or situation.