The economy's AS curve is often assumed to be relatively flat at low levels of real GDP. The underlying reasoning is tha

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The economy's AS curve is often assumed to be relatively flat at
low levels of real GDP. The underlying reasoning is that
Question 19 options:
the price level is constant.
at low levels of GDP, firms are faced with unused capacity and
thus can increase output without significantly increasing their
costs.
consumer demand for most goods tends to be price-inelastic when
output is low.
profits are normally high in this section of the AS curve, so
firms are willing to expand output.