Question
What is a guideline?
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Answer
The aggregate supply (AS) curve which is a 45° positively sloping line from the origin. It is also called a guideline. Every point on AS curve is equidistant from the horizontal axis and the vertical axis implying that total income is equal to total expenditure or spending. i.e., C + S. If whole of national income is spent on consumption of goods and services, S = 0. It is called break-even point.
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