Understanding the Differences Between LRAS and Keynesian Aggregate Supply Curve

The video tutorial explains the classical and Keynesian aggregate supply curves. The classical long-run aggregate supply (LRS) curve is vertical, indicating it is perfectly inelastic and represents the economy's full productive capacity. Shifts in the LRS curve occur due to changes in the quantity or quality of production factors. The Keynesian aggregate supply curve is more flexible, with sections that vary in elasticity. It can shift similarly to the LRS curve, affecting the point where it becomes vertical.

Describe the implications of an outward shift in the long run aggregate supply curve.

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What happens to real output and inflation when the economy approaches full employment output according to the Keynesian model?

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