1. Recessionary and Inflationary Gaps and supply shocks 2. It is very rare for a country’s actual output to equal its potential output - Think back to the PPC - does it…

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Aggregate demand and Aggregate Supply (AD and AS) notice the data: while potential GDP tends to move upward yr after yr, due to economic growth, actual GDP tends to rise…

Slide 11 Aggregate demand and Aggregate Supply (AD and AS)  notice the data: while potential GDP tends to move upward yr after yr, due to economic growth, actual GDP tends…

Slide 1 © 2006 McGraw-Hill Ryerson Limited. All rights reserved.1 Chapter 14: The AD-AS Model and Monetary Policy Prepared by: Kevin Richter, Douglas College Charlene Richter,…

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Aggregate Demand and Aggregate Supply: Explaining economic fluctuations - Revision of main concepts Francesco Daveri Two key facts on fluctuations Economic fluctuations occur…