17–27% of the AP exam. Key topics: Aggregate Demand (AD): components and shifters, Short-Run Aggregate Supply (SRAS): determinants and shifters, Long-Run Aggregate Supply (LRAS): full-employment output (Yfe), AD-AS model: short-run and long-run equilibrium; recessionary and inflationary gaps, Fiscal policy: discretionary government spending and tax changes; automatic stabilizers, Spending multiplier: 1 / MPS = 1 / (1 − MPC); tax multiplier: −MPC / MPS, Crowding out: interaction of fiscal policy expansion with the loanable funds market.
Study guide content for this unit is being prepared. Check back soon for complete lesson notes, formula sheets, and worked examples.
