What is the intermediate zone of the SRAS curve? Will a rise in output be accompanied by a rise or a fall in the price level in this zone?

Short-run aggregate supply (SRAS) is a graphical model that depicts the positive link between an economy's aggregate price level and the amount of aggregate output it produces.

Inflation and production growth move in opposite directions in the intermediate zone.

The Intermediate Zone is located between $E_i$and $E_k$in the diagram above. The AS curve is positively slanted in this zone. It should be observed that a rightward shift in the AD curve from AD to ${\mathrm{AD}}_k$leads in higher output but also higher prices. This indicates that as the economy approaches potential GDP, as shown by the LRAS curve, the economy will have a high price level, resulting in inflation.

On the other hand, if the AD curve shifts to the left, output will fall along with low prices, resulting in a recessionary condition.