MGMT 4B Lecture Notes - Lecture 2: Classical Economics, Aggregate Supply
Document Summary
If money is truly a veil - intervention by the government to stimulate growth in the economy using monetary policy is fruitless. Classical economists lived in a world where supply always made its own demand, everything always found its own equilibrium. Where aggregate supply and demand cross is macroeconomic equilibrium. Macroeconomic equilibrium: price and output level where neither buyers nor sellers wish to change their purchase, sales, or prices. Equilibrium in the asad model does not necessarily have to occur at full employment. Effects represented by inward or outward shifts in curve in two dimensional space.
