In the previous unit, students were introduced to key macroeconomic indicators and the business cycle. In this unit, students will learn how to represent and evaluate these concepts in the context of a specific economic model: the aggregate demand–aggregate supply model. The aggregate demand–aggregate supply model is a powerful tool that allows economists to represent the impact of spending and production decisions, economic fluctuations, and policy actions on macroeconomic outcomes, including output, income, unemployment, and inflation.
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