A vertical long-run aggregate supply curve labeled “LRAS.” The LRAS should be vertical at the full employment output. The placement of the LRAS curve will depend on whether the economy has an …

The concepts of supply and demand can be applied to the economy as a whole.

The aggregate demand (AD) curve shifts when people, businesses, or the government change how much they spend, invest, or tax. These shifts affect the total output and prices in the economy, …

Aggregate demand is the amount of total spending on domestic goods and services in an economy. The downward-sloping aggregate demand curve shows the relationship between the price level for …

We can find this point on the diagram below; it's where the aggregate supply, AS, and aggregate demand, AD, curves intersect, showing the equilibrium level of real GDP and the equilibrium price …

In this lesson summary review and remind yourself of the key terms and graphs related to the Phillips curve. Topics include the short-run Phillips curve (SRPC), the long-run Phillips curve, and the …

Learn about the different axes used for plotting aggregate demand, and explains three theories behind the downward slope of the aggregate demand curve: the wealth effect, the interest rate effect, and …

In this lesson summary review and remind yourself of the key terms and graphs related to a short-run macroeconomic equilibrium. Topics include how to model a short-run macroeconomic equilibrium …

If the aggregate supply curve shifts to the left, then a lower quantity of real GDP is produced at every price level. In this article, we'll discuss two of the most important factors that can lead to shifts in the …

Understanding and creating graphs are critical skills in macroeconomics. In this article, you’ll get a quick review of the Phillips curve model, including: 1. what it’s used to illustrate 2. key elements of the …