Question: Draw a conventional aggregate demand curve on a graph. Then add three different aggregate supply curves, labeled AS 1: Horizontal curve AS 2: Upward-sloping curve

Draw a conventional aggregate demand curve on a graph. Then add three different aggregate supply curves, labeled

AS1: Horizontal curve

AS2: Upward-sloping curve

AS3: Vertical curve

all intersecting the AD curve at the same point.

If AD were to increase (shift to the right), which AS curve would lead to

(a) The biggest increase in output?

(b) The least inflation?

(c) The largest jump in prices?

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