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Aggregate Demand and Aggregate Supply Analysis The aggregate demand and aggregate supply model enables us to explain short-run fluctuations in real GDP and price level. The aggregate demand curve shows the relationship between the price level and the level of planned aggregate expenditure by s, firms, and the government. What Drives the Business Cycle - Aggregate Supply and ... spending, and then we had net exports, this down sloping aggregate demand curve represents all of their spending, all of their response to the prices. And then, this up sloping aggregate supply curve, Lesson 8 - Aggregate Demand and Aggregate Supply Lesson 8 - Aggregate Demand and Aggregate Supply Acknowledgement: Ed Sexton and Kerry Webb were the primary authors of the material contained in this lesson. Section 1: Aggregate Demand The second macroeconomic model that we need to explore is known as the Aggregate Demand/Aggregate Supply Model.    Read More

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