Section: Principles of Macroeconomics

21)

The diagram above shows two aggregate supply curves. Which of the following statements most accurately characterizes the AS1 curve relative to the AS2 curve?

AS1 is classical because it reflects greater wage and price flexibility.
AS1 is classical because it reflects less wage and price flexibility.
AS1 is Keynesian because it reflects greater wage and price flexibility.
AS1 is Keynesian because it reflects less wage and price flexibility.
AS1 could be either classical or Keynesian because it reflects greater wage flexibility but less price flexibility.