Macroeconomics Aggregate Demand

Prior to beginning work on this discussion, read Chapter 6 in the course text and respond to the following components:

• Discuss the reasons why the aggregate demand (AD) curve slopes downward.
• What causes the AD curve and aggregate supply (AS) curve to shift, respectively?
• How would a change in AD and AS affect the economy, respectively?
• Why do Keynesian economists emphasize AD whereas classical economists emphasize AS?

Solution: