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3 Tutorials that teach Business Cycles, Aggregate Demand, and Aggregate Supply
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Business Cycles, Aggregate Demand, and Aggregate Supply

Business Cycles, Aggregate Demand, and Aggregate Supply

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Author: Colton Cranston
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This lesson covers the Business Cycles

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Tutorial

Notes on "Business Cycles, Aggregate Demand, and Aggregate Supply"

Key Terms

Peak

The business cycle period that coincides with the maximum obtainable

GDP for a given point in time.

Trough

The business cycle period that coincides with the lowest GDP for a given

point in time.

LRAS

Long-run aggregate supply is assumed to be constant in the long-run as

in the long-run resources are assumed to be used optimally, leaving no potential

for increasing capacity. LRAS is a vertical curve.

Aggregate Demand (AD)

Total amount of goods and services demanded in an

economy at a specific point in time and at a prevailing price level.

Sticky Prices

Refers to prices that do not easily move below threshold value

even though theory would anticipate a decline to re-establish market equilibrium.

SRAS

Short-run aggregate supply is assumed to maintain the positive price and

quantity correlation; more can be produced through increased resource

utilization, technological improvements or other factors. SRAS is an upward

sloping curve.