Final answer:
The aggregate supply curve shows the level of real GDP produced in the economy at different possible price levels during a period of time. It is not horizontal in the Keynesian range, but rather slopes upward, indicating that firms will produce more as prices rise. Similarly, it is not vertical in the classical range but rather steepens as it approaches potential GDP. Therefore, the correct answer to the question is a.
Step-by-step explanation:
The aggregate supply curve shows the level of real GDP produced in an economy at different possible price levels during a period of time. It is not horizontal in the Keynesian range, but rather slopes upward, indicating that firms will produce more as prices rise. Similarly, it is not vertical in the classical range but rather steepens as it approaches potential GDP.
For example, if there is an increase in aggregate demand, the aggregate supply curve will shift to the right, indicating that firms are producing more output at each price level. On the other hand, if there is a decrease in aggregate demand, the aggregate supply curve will shift to the left, indicating that firms are producing less output at each price level.
Therefore, the correct answer to the question is a. shows the level of real GDP produced in the economy at different possible price levels during a period of time.