ATARMAxxing · SACE Economics revision notes
The Monetarist AD-AS model in the short and long run
Business cycle and models
What this note covers
- What the AD-AS diagram shows and why the Monetarist version is used
- Aggregate demand: components and what shifts it
- Short-run aggregate supply: shape and shifters
- Long-run aggregate supply: fixed at potential output
- Short-run equilibrium, long-run equilibrium and the output gaps
- Worked example: a demand shock in Larkspur
- How this topic is examined and what separates a top response
7 sections · 10 key terms & formulas · 6 common mistakes
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