National income and price determination

This course is a part of AP®︎ Macroeconomics, a 9-course Topic series from Khan Academy.

In this unit, you'll learn how the aggregate supply and aggregate demand model helps explain the determination of equilibrium national output and the general price level, as well as to analyze and evaluate the effects of fiscal policy. You'll also learn about the impact of economic fluctuations on the economy’s output and price level, both in the short run and in the long run.

This course contains 9 segments:

Aggregate demand

A lesson on aggregate demand, its components and the model showing the relationship between a nation's aggregate price level and the quantity of real output demanded.

Multipliers

A lesson on the expenditure and tax multipliers

Short-run aggregate supply

A lesson on short-run aggregate supply, its determinants, and the relationship between a nation's aggregate price level and the quantity of output supplied by the nation's firms in the short run.

Long-run aggregate supply

A lesson on the total supply of output produced by a nation, otherwise known as the full employment, potential level of output

Equilibrium in the AD-AS Model

A lesson on the short-run equilibrium and real GDP determination in the AD-AS model

Changes in the AD-AS model in the short run

A lesson on how changes in aggregate demand and aggregate supply will affect equilibrium national output in the short run

Long run self-adjustment

A lesson on how an economy will adjust to changes in aggregate demand and aggregate supply in the long run, when all wages and prices are flexible

Fiscal policy

A lesson on fiscal policy: the government's use of taxes and spending to influence the level of aggregate demand, national output and employment, and the price level

Automatic stabilizers

A lesson on the automatic stabilizers built into government's budget which promote macroeconomic stability in the short run