Diagrams showing how shifts in aggregate demand (AD) and aggregate supply (AS) affect macroeconomic equilibrium – real GDP and price level (PL)
Includes short-run aggregate supply (SRAS) and long-run aggregate supply (LRAS) and classical and Keynesian view of LRAS curves.
Increase in AD when economy is close to full capacity
This shows an increase in AD when the economy is close to full capacity, causing a significant rise in price level.
