After reading this chapter, you should be able to

14.1 List and understand the determinants of aggregate demand.

14.2 List and understand the reasons for a negatively sloped aggregate demand curve.

14.3 List the main factors that shift the aggregate demand curve and distinguish between a shift in the aggregate demand curve and a movement along that curve.

14.4 Explain what determines aggregate supply in both the short run and the long run.

14.5 List and understand the main factors that shift the aggregate supply curve.

14.6 Explain how the price level and real GDP are determined and what causes economic growth, inflation, and economic fluctuations.

14.7 Discuss the classical and Keynesian macroeconomic models.