Aggregate Supply

In the Macroeconomics section of the course the main model we are interested in is the Aggregate Demand (AD) and Aggregate Supply (AS) model.  It is important that we understand not just what AS is and how to draw the curve, but what causes it to shift.  As with Microeconomics we need to distinguish between movements along the curve and shifts in the curve in order to analyse the impact of different changes and situations. The bigger issue with AS is that there isn’t just one AS curve, but rather 3 differing curves. Understanding the difference between these is something that helps with evaluation and analysis in the larger mark questions you will be writing.