Review Notes

Brief Introduction to AD and AS

- The graphical differences between AD/AS and D/S

- what is real national output?

- what is the price level?

- Aggregate Demand

- what is AD?

- why is AD downward sloping?

- the wealth effect

- the foreign sector substitution effect

- the interest rate effect.

- what other influences affect AD?

- Consumption

- Investment

- Government spending

- Net exports

- Aggregate Supply

- what is AS?

- why is AS upward sloping?

- lagging input prices

- money illusion

- what other influences affect AS?

- resource costs

- technology

- government influences upon labor/leisure choices

- Equilibrium

- where does equilibrium occur?

- predictions when shifts in AD/AS occur

- demand pull inflation

- cost push inflation

- etc.

Previous Topic

Next Topic