BoardEconomics

Short Run Equilibrium Output

1 Board Economics previous year questions on Short Run Equilibrium Output — options free on every question; 1 include the answer & explanation free, the rest unlock with PYQ Pass.

Q1 FREE PREVIEW
PYQ

Under the Keynesian theory, the Aggregate Supply curve is a straight line through the origin drawn at an angle of __________.
(Choose the correct option to fill in the blank)

a

25

b

45

c

55

d

75

✓ Correct answer: b)

45

Explanation

In the Keynesian short-run model with unused resources and fixed prices, the aggregate supply curve is represented by a 45-degree line through the origin, implying that output will adjust to meet demand.

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