Explanations of the short run aggregate supply curve

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Of the following explanations of the short run aggregate supply curve, which best explains the relatively horizontal area?

a. An increase in aggregate demand causes both the price level and real output to increase.

b. With an economy operating below potential output, an increase in aggregate demand causes real output to increase with no or little effect on the price level.

c. With an economy operating at potential output, an increase in aggregate demand causes a rise in the price level, but has no or little effect on real output.

Reference no: EM132229435

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