Aggregate demand and aggregate supply

Aggregate demand and aggregate supply. Keynesian thinking. Demand-pull and cost-push inflation. Fiscal and monetary policy.

This tutorial looks at supply and demand in aggregate-from the perspective of the entire economy (not just the market for one good or service). Instead of thinking of quantity of one good, we think of total output (GDP). Very useful model for thinking through macroeconomic events.

In the last tutorial, we claimed that the aggregate demand and aggregate supply model (AD-AS) would be useful for analyzing macroeconomic events. Well, in this tutorial, we'll do exactly that.

Economies never have a long steady march upwards. They constantly oscillate between growth and recession. This tutorial gives a little intuition for why that is.

Governments (and pseudo government entities like central banks) have two tools at their disposal to try to impact the business cycle --monetary and fiscal policy. This will help you understand what they are.

Whether you love him or hate him (or just consider him a friend that you respect but disagree with every-now-and-then), Keynes has helped define how many modern governments think about their economies. This tutorial explains how his thinking was a fundamental departure from classical economics.