Aggregate Demand and Aggregate Supply Graph

An Aggregate Demand & Aggregate Supply Graph represents the total demand and supply of goods and services in an economy at different price levels. The Aggregate Demand (AD) curve slopes downward, showing the inverse relationship between price levels and total output demanded. The Aggregate Supply (AS) curve can be short-run or long-run, indicating how production responds to price changes. The intersection of AD and AS determines the equilibrium price level and output, influencing inflation, unemployment, and economic growth. This graph is crucial for analyzing economic fluctuations, policy impacts, and overall market stability.

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