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    Short-run aggregate supply (SRAS)

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    The slope of the short run Aggregate Supply (AS) curve is important because it
    (a) explains the impact of supply side policies on the economy.
    (b) explains the impact of both supply and demand side policies on Y and P.
    (c) partially explains the impact of AD stabilization policies on Y and P.
    (d) None of the above.
    In the above practice round, which is the correct answer and why. Briefly explain.

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    Short-run aggregate supply (SRAS) shows the direct (positive) relationship between the price level and the quantity of aggregate output supplied in the short run, other ...

    Solution Summary

    Short-run aggregate supply (SRAS) is discussed.