When the money wage curve becomes steeper. Now as output is increased, not only does the marginal product of labor decline, causing an increase in unit co(WIMPN),but the rise in the money wage re quired to induce workers to supply more labor will also push up unit cost. As a result, any increase in output supplicd requires a larger increase in price; the aggregate supply curve is steeper Aggregate demand changes have still smaller output effects. output was completely In the classical system the aggregate supply curve was vertical; flexible. In the simple supply-determined. The price and wage were assumed to be perfectly and wages were IS LM curve model, output was completely demand-determined. Prices wage flexibil- completely rigid. The models in these two sections, by introducing price and ty in the Keynesian system, have brought the Keynesian results closer to those of the classi cal model. Still, the models in these sections remain"Keynesian" in the important sense that aggregate demand continues to play a role in determining the level of output.