Traditional Culture Encyclopedia - Traditional stories - Why does Keynesian theory think that the total supply curve is horizontal?
Why does Keynesian theory think that the total supply curve is horizontal?
Keynes's total supply curve is divided into two parts, that is, not achieving full employment and achieving full employment.
1. Before reaching full employment, the total supply curve is horizontal, that is, at a given price level, society can continue to use unused resources for production.
2. After reaching full employment, the total supply curve is vertical, that is, resources have been fully utilized, output can not continue to increase, and the increase in demand will lead to a straight-line rise in value without market.
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