Chapter 10 – Real GDP and the Price Level in the Long Run OutlineI.Output Growth and the Long-Run Aggregate Supply Curve:The total of all planned production for the entire economy is referred to as the aggregate supply of real output.
II.Total Expenditures and Aggregate Demand:The spending decisions of individuals, firms, governments, and foreigners determine the total value of nominal GDP. There are two issues that need to be addressed. The first issue is what determines the total amount that individuals, governments, businesses, and foreigners want to spend? Second, what determines the equilibrium price level and the rate of inflation? The total