The aggregate demand and aggregate supply model helps us to understand both short-run economic fluctuations and how the economy moves from the short to the long run.

Question

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The aggregate demand and aggregate supply model is a fundamental economic tool that explains short-run fluctuations in real GDP and price level, as well as how the economy transitions from the short run to the long run, adjusting to changes in aggregate demand and supply over time.

The Aggregate Demand and Aggregate Supply Model Helps Us to Understand