The aggregate demand and supply model is introduced and explained in this Module. The determinants and shift factors for aggregate demand, short run aggregate supply, and long run aggregate supply are explained. Moreover, these curves are combined to characterize the macroeconomic equilibrium in static and dynamic settings.
Describe and show what causes aggregate demand, short run aggregate supply, and long run aggregate supply to change.
Draw the macroeconomic equilibrium on an aggregate demand and supply diagram.