Aggregate Demand and Aggregate Supply

1. Slope of aggregate demand

• Y = C + I + G + NX
• Wealth effect: C=C(P)
• Interest rate effect: money supply, money demand ... (P and r are positively related)
• Exchange rate effect: when r rises, dollar appreciates and NX falls ...

2. Shifts of aggregate demand

• Consumption
• Investment
• Government spending
• Net exports

3. Long run aggregate supply

• MV = PY
• Y = f(L,N,H,K,T)

4. Shifts in LRAS

• Changes in labor
• Changes in capital
• Changes in natural resources
• Changes in technology

4. Long run equilibrium

• AD shifts
• LRAS shifts

5. Short run aggregate supply

• Sticky wages
• Sticky prices
• Misperceptions

6. Shifts in SRAS

• Same as shifts in LRAS
• Price expectations