Aggregate Demand (AD) and Aggregate Supply (AS)

Aggregate demand (AD) and aggregate supply (AS)

Aggregate demand (AD) and aggregate supply (AS) analysis provide a way of illustrating macroeconomic relationships and the effects of government policy changes.

Aggregate Demand

Aggregate demand is the total demand for final goods and services in the economy (Y) at a given time and price level. It is the amount of goods and services in the economy that will be purchased at all possible price levels.

Aggregate Supply

Aggregate supply is the total supply of goods and services produced by a national economy during a specific time period. It is the total amount of goods and services in the economy available at all possible price levels.