In this lesson, our instructor Jibin Park gives an introduction on aggregate supply and demand curve. He discusses the long run macroeconomic equilibrium, the AD-AS model, long run approach, self-correcting recessionary gap, expansionary fiscal policy, the long-run approach, self-correcting inflationary gap, contractionary fiscal policy, and stabilization policy.
The short-run macroeconomic equilibrium occurs where the SRAS = AD
The long-run macroeconomic equilibrium occurs where the LRAS = AD
If the short-run equilibrium is to the left of the long-run equilibrium, the economy is experiencing a recession
If the short-run equilibrium is to the right of the long-run equilibrium, the economy is experiencing inflation
In the long-run, the economy will “self-correct” with the SRAS moving back to the LRAS
Expansionary fiscal and monetary policy make sense when the economy is experiencing a recession
Contractionary fiscal and monetary policy usually take place in reaction to inflationary times
Aggregate Supply & Demand
Lecture Slides are screen-captured images of important points in the lecture. Students can download and print out these lecture slide images to do practice problems as well as take notes while watching the lecture.
This book created a 5-step plan to help you study more effectively, use your preparation time wisely, and get your best score. This book includes two full-length practice exams modeled on the real test, all the terms and concepts you need to know to get your best score, and your choice of three customized study schedules.
This book includes an in-depth preparation for both AP economics exams. It features two full-length practice tests, one in Microeconomics and one in Macroeconomics, and all test questions answered and explained. It also features a detailed review of all test topics, which include: supply and demand, theory of consumer choice, economics in the public sector, costs, perfect and imperfect competition, monopolies, labor resources, game theory, the national income and gross domestic product, inflation and unemployment, fiscal policy, money and banking, monetary policy, economic growth, international trade and exchange, interest rate determination, and the market for loanable funds.