Section 2
Introducing Aggregate Demand and Aggregate Supply
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Boundless Economics
Economics
by Boundless
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Explaining Fluctuations in Output
In the short run, output fluctuates with shifts in either aggregate supply or aggregate demand; in the long run, only aggregate supply affects output.
Classical Theory
Classical theory, the first modern school of economic thought, reoriented economics from individual interests to national interests.
Keynesian Theory
Keynesian economics states that in the short-run, economic output is substantially influenced by aggregate demand.