{"id":840,"date":"2011-11-01T22:43:27","date_gmt":"2011-11-02T04:43:27","guid":{"rendered":"http:\/\/opengecko.com\/economics\/aggregate-supply-and-macroeconomic-equilibria\/"},"modified":"2011-11-01T22:43:27","modified_gmt":"2011-11-02T04:43:27","slug":"aggregate-supply-and-macroeconomic-equilibria","status":"publish","type":"post","link":"https:\/\/opengecko.com\/geckoview\/economics\/aggregate-supply-and-macroeconomic-equilibria\/","title":{"rendered":"Aggregate Supply and Macroeconomic Equilibria"},"content":{"rendered":"

This title refers to a lot of theory which it is worth having explained to you first by a teacher of Economics. Having looked at Aggregate Demand, we now introduce Aggregate Supply which gets a bit complicated with two different schools of thought, and we also need to refer to three possible different equilibrium situations (at full employment, the deflationary (or recessionary) gap and the inflationary gap). Equilibria is simply the plural of equilibrium. <\/font><\/p>\n

Here are the syllabus requirements:<\/font><\/p>\n

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\u2022 Aggregate supply<\/font><\/p>\n

a) short-run<\/font><\/p>\n

b) long-run (Keynesian versus neo-classical approach)<\/font><\/p>\n

\u2022 Full employment level of national income<\/font><\/p>\n

\u2022 Equilibrium level of national income<\/font><\/p>\n

\u2022 Inflationary gap<\/font><\/p>\n

\u2022 Deflationary gap<\/font><\/p>\n<\/blockquote>\n

Make sure you can define each of these as well as explain them.<\/font><\/p>\n

To recap on inflationary and recessionary (deflationary) gaps, refer to this video by ACDCLeadership<\/strong><\/a> <\/b>but note<\/b> that it explains it from a neo-classical perspective. He then goes on to explore fiscal and monetary policy responses, which we will explore in more detail later, but is worth watching now.<\/font><\/p>\n