Answer:
the economy will attain equilibrium at potential output when the short-run aggregate supply curve shifts to the right due to a fall in real wages.
Explanation:
According to the Keynesian model, in the aggregate supply curve, there are three distinct zones, which show that when the overall production of the economy increases, the general price levels also increase.
When real GDP is low - there is idle capacity - companies can increase their production without pushing prices - the aggregate supply curve, in this stretch until Y0, is practically horizontal. At intermediate levels of production, to increase
their production, companies will incur marginal cost increases - the aggregate supply curve is tilted upwards.
When real GDP is high, companies practically reach their production capacity limit in the short term - the aggregate supply curve becomes practically vertical, and only prices can practically rise from Y1.
In this context, those who advocate a passive approach to politics believe that the economy will reach equilibrium in potential production when the short-term aggregate supply curve shifts to the right due to a fall in real wages.
