ECO202 Lecture Notes - Aggregate Demand, Aggregate Supply, Lesson Learned
29 Nov 2022
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I hope this homework week was a success for everyone. For some reason, it seemed to be so difficult to find a diagram for this prompt. I wanted to find something from the internet to make my work more diverse than just using the textbook example. However, i was able to finally find something i could analyze for this discussion. The model i found was based on the changes in the gdp. So, that will be the factor for me to analyze how aggregate shifts affect gdp during. In the first model on the left, it is fair to conclude that the aggregate demand is high due to the prices shifting to a higher rate. When prices rise, so do interest rates and that causes a rise in the inflation rate. Because the prices become higher during a recession to make up for the economic losses, there is a severe drop in the real.
