Keynes’ Law and Say’s Law in the AD/AS Model

Review Questions

What is the Keynesian zone of the SRAS curve? How much is the price level likely to change in the Keynesian zone?

What is the neoclassical zone of the SRAS curve? How much is the output level likely to change in the neoclassical zone?

What is the intermediate zone of the SRAS curve? Will a rise in output be accompanied by a rise or a fall in the price level in this zone?