Macro Econ Shifts

• Macroeconomic equilibrium can be represented by shifting curves SRAS and AD.
• The classical model can be used to shift AD by simply moving SRAS and AD to the right, resulting in an increase in economic growth and an increase in demand for inflationary pressure.
• The Keynesian interpretation of the SRAS curve includes an LRAS curve, which can be used to show the same outcomes as the classical model.
• In the Keynesian interpretation, AD is represented as cutting LRAS at the Sweet Spot, the Bendy part of LRAS, resulting in the same outcomes as the classical model.
• The classical model of SRAS is represented as a vertical long-run aggregate supply curve, with an ad curve on it, indicating an increase in both actual and potential growth and a reduction in cost push inflationary pressure.
• The simplified version of SRAS is represented as SRAS1 to SRAS2, where SRAS1 is the initial equilibrium price level and SRAS2 is the new equilibrium price level.
• The Keynesian interpretation of SRAS is represented as a curve that cuts SRAS in the Bendy pive in The Sweet Spot, with four different real GDP levels on the x-axis, indicating an increase in potential growth, an increase in actual growth, and a reduction in cost push inflationary pressure.
• If there is a change in cost of production that affects all firms in the economy, it can be represented by shifting SRAS.
• Shifts in SRAS can be represented simply by moving SRAS to the right or left, indicating an increase or decrease in economic growth and cost push inflationary pressure.