Output is determined by the supply side: supplies of capital, labor technology. Changes in demand for goods & services (C, I, G ) only affect prices, not quantities. Assumes complete price flexibility. Applies to the long run.
Output is determined by the supply side:supplies of capital, labortechnology.Changes in demand for goods & services (C, I, G ) only affect prices, not quantities.Assumes complete price flexibility. Applies to the long run.