Chapter Eight: Module Intro -- Aggregate Demand and Aggregate Supply
The first seven modules introduced you to the world of macroeconomics and familiarized you with the major concepts. We discussed GDP, business cycles, inflation, unemployment, and foreign exchange. Now we are ready to begin a theoretical modeling of how the economy operates.
In this chapter, we construct Aggregate Demand and Aggregate Supply curves, and use them to determine the equilibrium price level and output in the economy. These curves are different from microeconomic demand and supply curves, but much of the reasoning is similar. We recommend that you read the lecture notes first, then take the on-line quiz to test your knowledge of the material. Finally, review the module summary to reinforce the main concepts.