ECON 1100 Lecture 9: ECON 1100 - 9 - Chapter 9.pdf
1 Dec 2014
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Macroeconomic equilibrium in the long run and the short run. A dynamic aggregate demand and aggregate supply model. Ad-as model: the ad-as model is an extension of the keynesian (ae) model in that it explains price adjustments. Identify the determinants of aggregate demand and distinguish between a movement along the aggregate demand curve and a shift of the curve. Shifts of the aggregate demand curve versus movements along it. The aggregate demand curve tells us the relationship between the price level and the quantity of real gdp demanded, holding everything else constant. If the price level changes but other variables that affect the willingness of households, firms, and the government to spend are unchanged, the economy will move up or down a stationary aggregate demand curve. If any variable other than the price level changes, the aggregate demand curve will shift. The variables that shift the aggregate demand curve.
