Explain why the Aggregate Supply curve becomes increasingly...

  • University of Delaware
  • MISY 1160
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ECON102: Suggested answer key to questions for Session 3 answers are in blue Instructor: N. Aman 1) Explain why the Aggregate Supply curve becomes increasingly steeply sloped at levels of RGDP near "full employment" and becomes especially steeply sloped beyond "full employment" RGDP.
2) Why might the rate at which the Aggregate Supply curve shifts vertically upward increase when an economy produces beyond full employment? (Hint: think about the effect of very low unemployment rates on the balance of bargaining power between employers and workers)

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