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SRAS |
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The general textbook 'resolution' is to assume the existence of a positively sloped short-run aggregate supply curve, however with a vertical 'long-run supply curve' indicating the absence of a relationship between the general price level and real output. If there is a shock to aggregate supply that shifts the short-run aggregate supply curve to SRAS', the full-information level of output increases to [Y. The Short-Run Aggregate Supply Curve and the Phillips Curve |
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