short run equib

• What occurs at the point of national output equilibrium?

  Aggregate demand intersects with aggregate supply
• What does classical theory state about short run equilibrium?

  The economy is at AP1Y1
• What happens to the AD curve if its components change?

  It shifts left or right
• What is the result of changes to the determinants of SRAS?

  It shifts the SRAS curve left or right
• What are the key components affecting aggregate demand (AD)?

  • Consumer spending
  • Investment spending
  • Government spending
  • Net exports
• What are the determinants of short-run aggregate supply (SRAS)?

  • Input prices
  • Productivity
  • Government policies
  • Supply shocks
• diagram s.r