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Q. Aggregate supply in AS-AD model?
In order to figure out all the variables in AS-AD model, we need one more equilibrium condition so that we can identify a unique point on AD curve as the unique equilibrium. This condition will come from production side and labor market.
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AD-curve, just like before, displays combinations of Y and P where both goods market and money market are in equilibrium. At any given instance, even when we have inflation, aggreg
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