Chapter 33

Chapter 33 is all about the aggregate demand and aggregate supply model. The model consists of the long run agg. supply, and the two slopes for the short run agg. demand and supply. The factors of production affect the supply curve, both in the short and long run. The things that affect the demand curve is the wealth, interest rate, and exchange rate effects. Two major periods of falls in the economy are recession and stagflation. Stagflation is when there is high price levels and low amount of output.