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Say you have a Keynesian diagram showing a recessionary gap where actual output is less than potential output, and aggregate demand is on the left of the full employment level of output (Yfe). If AD increases and shifts to the right, but does not reach the full employment level of output, and the price level (PL) increases, and the new AD curve is still on the left side of Yfe, would the increase in PL be called 'inflation'? How do you know whether there is spare capacity in an economy? When reading an article, how do you know whether aggregate demand is in the spare capacity section? Can AD be somewhere in the middle - in between completely spare capacity and full capacity? What are the characteristics of this section? Why are prices and wages sticky/inflexible? Can they be upwardly sticky/inflexible?