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Why AS curve is 45° line??

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Why AS curve is 45° line??

Posted by Manish Agarwall 6 years, 8 months ago

CBSE > Class 12 > Economics

3 answers

Rajat Katkani 6 years, 8 months ago

Aggregate supply curve aur income line is 45 degree line is aggregate supply is the sum total of consumption expenditure and savings and also income can be disposed in 2 ways that is it can either be consumed or saved hence concluding that aggregate supply and income are both the same thing and while putting it on graph we take it on the y-axis and income employment and output on the x-axis but as both are the same thing when it is put it on graph all the points are equidistant from x axis as well as y-axis creating a line which is 45 degree positively slope

Manish Agarwall 6 years, 8 months ago

Can you elaborate witg example

J K 6 years, 8 months ago

At every point of 45°degree line AD will be equal to AS

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