Question

In the AD-AS model...

1)the AS curve illustrates the levels of total expenditure in the economy at various price levels.
2)we cannot study monetary policy because the model assumes interest rates to be fixed.
3)the level of economic activity is determined by aggregate supply, given the general prices in the economy.
4)we seek to explain the general price level and the aggregate production of goods and services.

Answer 1

4)we seek to explain the general price level and the aggregate production of goods and services.