Tag: aggregate-supply

3 pages tagged aggregate-supply.

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Chapter 48: Aggregate Demand and Aggregate Supply — Economics 101

Aggregate demand (AD) and aggregate supply (AS) are the macroeconomic counterparts to the individual market’s supply-and-demand model. Together they explain why economies expand and contract, why unemployment and inflation move the way they do, and why the short run and long run behave so differently.
Chapter 49: Macroeconomic Equilibrium — Economics 101

Macroeconomic equilibrium is where aggregate demand meets aggregate supply. Short-run equilibria can sit above or below the economy’s long-run potential — creating inflationary or recessionary gaps. Classical economists trust markets to close those gaps automatically; Keynesians don’t.
Chapter 54: Supply-Side Economics — Economics 101

Supply-side economics emerged in the 1970s as a direct response to stagflation — the failure of Keynesian demand management to handle simultaneous high unemployment and high inflation. It argues that tax cuts, deregulation, and reduced government interference unlock productive capacity and grow the economy from the supply side.