Purchase Solution

differences between the Classical Supply/Demand Model and the AS/AD model

Not what you're looking for?

Ask Custom Question

What are some of the differences between the Classical Supply/Demand Model and the AS/AD model?

Purchase this Solution
Solution Summary

Differences between the Classical Supply/Demand Model and the AS/AD model are cited.

Solution Preview

Please note: Most of the information here I got from class notes and handouts from different economic courses that I have taken.
<br>
<br>Aggregate Demand curves, like ordinary demand curves, reflect the quantity of goods and services being demanded by all members of society at every given price level. However, it reflects the real value of the aggregate quantity of goods relative to some index of prices in the economy (e.g. Consumer Price Index, or the GDP deflator). Instead of noting a relationship ...

Purchase this Solution
Free BrainMass Quizzes
Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

View More Free Quizzes
Related BrainMass Solutions

  • differences between the multiplier model and the AS/AD model

    17030 Differences Between the Multiplier Model and the AS/AD Model What are the differences between the multiplier model and the AS/AD model?

  • Unemployment can be caused by a decrease of aggregate demand

    You can look at different parts of the AS curve, i.e. classical model, general model, keynesian model, etc. and observe how a decrease in AS affects each situation.

  • Economics: Demand and Supply

    183004 Differentiate between demand and supply side theories Explain the effects of monetary and fiscal policy on economic activity using both IS/LM and AS/AD models. Also explain the difference between the supply side and demand theories.

  • Effect of Economic Stimulus Under 2 Macroeconomic Theories

    Conduct the same exercise as in #1 using the Classical model. Explain how the price level will be affected by these expenditures in the short-run. Explain how GDP is affected in the long-run. 3. Compare your results from #1 and #2.

  • AD/AS, IS/LM, Keynesian Cross, Money Mkts. & fiscal policy.

    In the basic supply and demand analysis, we usually look at the demand curve and the supply curve for one commodity in a market. When we look at the macro economy, the corresponding terms are called Aggregate Demand (AD) and Aggregate Supply (AS).

  • AS/AD model

    The AS-AD model, inspired by the standard market model, captures the interaction between aggregate demand (the buyers) and short-run and long-run aggregate supply (the sellers).

  • Anticipating a tax cut

    To properly respond to the question, we need to examine the classical model. From the classical economist's point of view, remember the two basic theories of classical economics: Say's law (supply creates its own demand) and price-wage flexibility.

  • AD/AS as a framework for fiscal and monetary policies

    Label the aggregate demand curve as AD and the aggregate supply curve as AS. be sure to label the axes appropriately. Recall that Price for the AD/AS model refers to the general price level not the price of any particular good.

  • Determining Equilibrium Real GDP and the Price Level

    162918 Determining Equilibrium Real GDP and the Price Level Consider a country with an economic structure consistent with the assumption of the classical model.

View More Related Solutions