If prices are flexible and the wage are not, this is going to cause an equilibrium to be at wage D.
Equilibrium may change when the prices of goods are increased or decreased or the demands of goods increase and decrease.
When this is the case the changes is going to be visible in the curve as it would shift from one point on the curve to another point.
The nation is said to be at the point of short run equilibrium when they are at the point where the output id the same as the as the output that is supplied.
This is represented as AD1 intersecting AS1. But at a point where the wages and the prices are not flexible then it would bring about a decrease to the equilibrium at E.
An increase in AD would lead to greater out put in the nation by causing the GDP to rise. The issue is that it may bring about increase in inflation.
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