Aggregate Demand (AD) and Aggregate Supply (AS) are core macroeconomic concepts used to explain overall price levels, output, and economic fluctuations in an economy.
Aggregate Demand (AD)
Aggregate Demand is the total demand for all final goods and services in an economy at a given price level and during a specific period.
Why AD slopes downward:
- Interest rate effect
- Wealth effect
- Exchange rate effect
Aggregate Supply (AS)
Aggregate Supply shows the total output firms are willing to produce at different price levels.
AD–AS Equilibrium
THE ETERNAL SOVEREIGN 