Financial Accounting- Classical Aggregate Supply

Question

According to Classical Aggregate supply....

Government wants to increase aggregate demand to reduce unemployment

what happens to output?

what happens to unemployment?

what happens to price level?

I need help to understand it. Thanks!

Answer 1

Classical theory focuses on economies of scale and answers to your question are easy to derive from the theory itself.

Like output would increase as more you produce.

unemployment will be lower, bcoz higher manufacturing

price is cheap with abundant supply of product which is more than demand.