Classical and Keynesian Views of Aggregate Supply

According to classical/neo classical, they did not use demand and supply model. AS is vertical and = Poential GDP. In the long run, the economy will be t full employment. Therefore AS is the total of all final goods and services when all resources are utilized. According to neo-classical theory, increase in AD will only lead to inflation(prices go up). The only way to grow the economy is to increase the amount of natural resources, capital goods, technology and the quantity and quality of workers. they also said no govt intervention because it will only drive up prices. because when D goes up, prices goes up -> interest up -> D goes down.
If wages goes up => unemployment to go up => income will go down => demand will go down.
the classical has the Supply curve as the potential GDP so it is a straight up and down line. increasing demand only causes inflation. to grow the economy you have to shift the potential GDP(increase natural resources, technology, quantity and quality of labour.

Because of rubber barons(monopoly) and labour unions, wages and prices were sticky (in flexible).
AS is a horizontal line(flat line). changing AD will make economy grow and have little to no impact on prices(inflation).Aggregate demand will increases economic growth when government spending and investment spending increase.

Today's view is a combination of the two.because as the real GDP gets bigger the supply curve gets steeper.( sometimes classical economists are right and sometimes Keynesian economist is right)
price level
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Real GDP
Dr. Stephanie Powers, "Aggregate Supply", Intro to Macroeconomics.(Lecture, Donald School of Business, Red Deer Alberta, Winter 2012)