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Unformatted text preview: through why the aggregate demand curve is downward sloping. We will also catch a glimpse of how the aggregate demand curve is derived. Finally, we will see how the aggregate demand curve shifts when economic variables change the aggregate demand. By understanding the basics of aggregate demand as presented in this section, you will be preparing yourself for the big picture of the macroeconomy that follows when aggregate demand and aggregate supply are combined. This allows policies and economic changes to be evaluated in a highly realistic model. Through the combined aggregate supply aggregate demand, or AS-AD, model, macroeconomic theory approaches macroeconomic reality. In this way, the AS-AD model is the centerpiece of evaluating macroeconomic policy decisions....
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This note was uploaded on 12/13/2011 for the course ECO 1310 taught by Professor Staff during the Fall '10 term at Texas State.
- Fall '10