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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.
Supply of labor, L S (W/P), depends positively on real wages in classical model. It isn't always clear which individuals are included in the labor supply. Labor supply may consist
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