What you’ll learn to do: use the AD-AS model to explain the equilibrium levels of real GDP and price level

In this learning outcome, you will become an expert at understanding, defining, and applying the concepts of aggregate demand and aggregate supply.

The specific things you’ll learn in this section include:

• Define aggregate demand (AD) and explain the factors that cause it to change
• Define aggregate supply (AS) and explain the factors that cause it to change
• Use the AD-AS model to explain periods of recession, and expansion, demand-pull inflation and cost-push inflation
• Use the AD-AS model to explain periods of economic growth

LEARNING ACTIVITIES

The learning activities for this section include:

• Reading: The Aggregate Demand-Aggregate Supply Model
• Reading: Macroeconomic Perspectives on Demand and Supply
• Reading: Building a Model of Aggregate Supply and Aggregate Demand
• Reading: Aggregate Demand
• Reading: Shifts in Aggregate Supply
• Reading: The Long Run and the Short Run
• Reading: Shifts in Aggregate Demand
• Self Check: The Aggregate Demand-Aggregate Supply Model
• Reading: Growth and Recession in the AS–AD Diagram
• Reading: The AS–AD Model and Economic Growth
• Simulation: Spend or Save—Government Edition
• Self Check: The AD-AS Model and Growth, Recession, Expansion, and Inflation

Take time to review and reflect on each of these activities in order to improve your performance on the assessment for this section.