How many types of total supply curves are there?

(1) The classic aggregate supply curve, also known as the long-term aggregate supply curve. Classical economists believe that based on the assumption that wages are completely flexible or the market is completely competitive, the employment level in the economy does not follow the price.

The grid changes, but it is always in a state of full employment, when the total supply curve is a straight line. The vertical total supply curve shows that in the long run, economic output is mainly determined by the number of fully employed labor, and has nothing to do with the price level. The policy implication is that the macroeconomic policy of long-term aggregate demand management can not increase output and employment, but can only change the price level, and Keynesian policy is invalid.

(2) Keynesian aggregate supply curve. Keynesianism, based on the downward rigidity of monetary wages and money illusion's hypothesis, holds that the total supply curve is a curve that inclines to the upper right before the economy achieves full employment, and then turns into a vertical line after full employment.

(3) Simplified Keynesian aggregate supply curve. Western scholars tend to further simplify the above curve and regard the part of the curve inclined to the upper right as a horizontal line. Their economic meaning is that before reaching the national income of full employment, the economy and society can provide any amount of national income at a roughly constant price, and after reaching full employment, no matter how the total demand changes, the national income will no longer increase, and only inflation will occur. Its policy implication is that the economy has not achieved full employment and macro-economy of total demand management in the short term.