Modern Theory of Aggregate Supply and Aggregate Demand

Modern Theory of Aggregate Supply and Aggregate Demand

Introduction

From the neoclassical theory of macroeconomics, it has been known that supply and demand for particular goods balance each other, which is manifested in the equilibrium price. For the consideration of supply and demand for specific goods to the consideration of supply and demand in the society as a whole, it is necessary to take into account supply and demand for all goods and aggregate level of prices. This essay will discuss the modern theoretical model of aggregate supply and demand.

Discussion

The concept of aggregate demand and aggregate supply are ...