In this article we will discuss about the role of Aggregate Demand (AD) and Aggregate Supply (AS) in the Keynesian Model, explained with the help of a suitable diagram. In the Keynesian model an important role is played by aggregate demand, which consists of four components. First, there is household consumption, the main component of aggregate demand. Secondly, there is [...]
In this article we will discuss about the role of Aggregate Demand (AD) and Aggregate Supply (AS) in the Keynesian Model, explained with the help of a suitable diagram. Like the Keynesian model, the classical model also employs aggregate supply and aggregate demand—but with two important differences. First, the aggregate supply schedule corresponding to SAS in Fig. 10 is assumed [...]
This article will help you to learn about the difference between the Classicists and Keynes on Aggregate Demand (AD) and Aggregate Supply (AS). Difference between Classicists and Keynes on Aggregate Demand and Aggregate Supply The classical economists believed in the operation of the Say's Law of Markets which states that supply creates its own demand. They also assumed sufficient wage-price [...]