Final answer:
The Keynesian LRAS curve is typically represented as vertical at the level of potential GDP, but Keynesians focus mainly on the short-run, where the SRAS curve can increase output without much inflation in its flat left segment, known as the 'Keynesian zone'.
Step-by-step explanation:
The Keynesian Long Run Aggregate Supply curve (LRAS) does not actually exist as Keynesians believe that in the long run, we all die, so only the short-run matters. However, for reference in Keynesian models, one might draw a vertical LRAS curve at the level of potential GDP, reflecting the idea that in the long run, an economy's output is determined by its productive capacity rather than the price level. In the short run, the Keynesian model uses an upward sloping SRAS curve, with a distinct 'Keynesian zone' on its far left side. This portion of the SRAS is relatively flat, indicating that when real GDP is significantly below potential GDP (for instance, during a recession), increases in aggregate demand can raise output without much inflationary pressure.In the Keynesian framework, when aggregate demand intersects this flat portion of the SRAS curve, an equilibrium such as point Ek can occur, with the economy operating significantly below potential GDP, high cyclical unemployment, and minimal worry about rising price levels.
If aggregate demand shifts in the Keynesian zone, it mainly affects output and unemployment, rather than the price level. Essentially, in the Keynesian view, short-run economic fluctuations are more important to address than long run.The Keynesian LRAS curve, also known as the long-run aggregate supply curve, is a vertical line located at potential GDP. It represents the level of output that can be sustained in the long run without causing inflationary or recessionary pressures in the economy. In the Keynesian zone, which is the portion of the short-run aggregate supply curve on the far left, the equilibrium level of real GDP is far below potential GDP, indicating a recessionary situation with high cyclical unemployment.