After completing this chapter, students will be able to: Describe how the aggregate demand-aggregate supply model explains periods of demand-pull inflation, cost-push inflation, and recession; identify how the aggregate demand curve relates to the aggregate expenditures model.
29A Appendix Aggregate Demand and Aggregate Supply McGrawHill/Irwin Copyright © 2012 by The McGrawHill Companies, Inc. All rights reserved Derivation of Aggregate Demand Aggregate Expenditures (billions of dollars) LO1 LO1 LO1 45° Price Level AE1 (at P1 ) AE2 (at P2 ) AE3 (at P3 ) P3 P2 P1 AD Q3 LO5 Q2 Q1 Real Domestic Product, GDP 29App-2 Aggregate Demand Shifts AE2 (at P1 ) AE1 (at P1 ) P1 AD2 AD1 Q1 LO5 Q2 29App-3 ...Derivation of Aggregate Demand Aggregate Expenditures (billions of dollars) LO1 LO1 LO1 45° Price Level AE1 (at P1 ) AE2 (at P2 ) AE3 (at P3 ) P3 P2 P1 AD Q3 LO5 Q2 Q1 Real Domestic Product, GDP 29App-2 Aggregate Demand Shifts... P1 AD Q3 LO5 Q2 Q1 Real Domestic Product, GDP 29App-2 Aggregate Demand Shifts AE2 (at P1 ) AE1 (at P1 ) P1 AD2 AD1 Q1 LO5 Q2 29App-3