Part 4

Modeling the Short-Run Macro Economy

IN THIS PART …

Aggregate demand makes up one half of the Aggregate Demand– Aggregate Supply (AD–AS) model. Find out what makes up aggregate demand and examine the AD curve.

Aggregate supply makes up the other half of the AD–AS model. Discover what factors affect how much firms can produce and how aggregate supply affects prices and economic growth.

Put the AD–AS model to work analyzing shocks to the economy.