Overall macroeconomic equilibrium

Aggregate Demand and Aggregate Supply Model (AD-AS) The equilibrium of supply and demand in the national economy is reached at the intersection of the aggregate demand and aggregate supply curves (Figure 8.2). Suppose the price level is P1. At this level, supply would be Q1 and demand would be Q2. Since demand exceeds supply, competition […]

Aggregate demand and aggregate supply: concepts, structure and factors that determine them

The section “Microeconomics” analyzes the demand, supply and price of individual goods in single markets. In the section “Macroeconomics” these categories are considered at the level of the national economy. Therefore, here the concepts of “demand”, “supply” and “price” are applied to all products and services created in the country, i.e. to the national product. […]