Those economists who view the AS curve as being vertical see more government tools capable of raising Real GDP than do the economists who view the AS curve as being upward-sloping.

Question

Quizplus · Accepted Answer

Economists who view the AS curve as being upward-sloping believe that there are limits to the government's ability to increase Real GDP by using monetary and fiscal policies. This is because they believe that higher demand will eventually lead to higher prices, resulting in a decrease in Real GDP. Those who view the AS curve as being vertical believe that there are fewer such limits and more tools available to the government to increase Real GDP.

Those Economists Who View the AS Curve as Being Vertical