Demand and Supply Shocks in the AD-AS Model

In our last video we looked at inflationary and recessionary gaps in the AD/AS model. In this lesson we'll examine what causes output gaps: negative and positive shocks to aggregate demand and aggregate supply.
econclassroom.com

[@jacntt04]

Hey man, you probably just saved my Political Economy final… I’ll let you know!

[@maxmorris4562]

This is a great way of learning, thanks for this

[@mateuszfranczyk4148]

Fantastic explained!! Thanks a lot :D

[@hcapppp]

Great video! greetings from Sweden

[@bossking8309]

Thanks a lot you are better than my Dozent in Germany I have to watch the Video twice to follow your english but it’s really good because it’s simple explained!!!

[@PunmasterSTP]

How have your studies been going?

[@PunmasterSTP]

AD-AS Model? More like "Great information; thanks for the video!" 👍

[@stefanoliver9529]

What about supply and demand shocks at the same time from a international pandemic. Just hypothetically

[@realdvgarg]

yesn't

[@ta55o5]

just yeet everything

[@realdvgarg]

@@ta55o5 YEET *kobe noises*

[@perezgroupllc]

Then we're fuked!, ..."hypothetically" that is ;)
Bitcoin! **cough**

[@kellyk104]

Right? hypothetically.....say 2 years later... Low unemployment, high prices, low supply and then BAM! high inflation! Merry Christmas. "Snip Snap, Snip Snap"- Michael Scott

[@EdgarIturraEMF]

Thanks, you are my heroooo. congrats from chilee

[@WikiSauce]

Thanks!

[@hannahbitebekezi4670]

how do supply shocks self correct?

[@bossking8309]

Why you didnt make the As in a curve? Isnt it actually a curve

[@PunmasterSTP]

I think drawing curves as straight lines can be a decent approximation under a lot of circumstances.

[@jean-baptistefleury2383]

I don't understand why an increase in companies' costs would not change LRAS. These increased costs are not only related to people's price expectations, but also to the opportunity cost of resources. Importing oil at a much steeper price is akin to having sort of a negative technological change, don't you think?

[@chuckwalker1899]

Jean-Baptiste Fleury because only technology and productivity can increase the supply, like the invention of the printing press, the long term supply of printed texts grew exponentially meaning that we can now print more than we possibly could have in the past

[@Newpr3toria]

@@chuckwalker1899 I still don't get it. International trade is a form of technology. Conceptually, there is no difference between combining various materials to produce a car (thus, at a given cost), and producing a car by selling, say, your corn to japan in exchange of japanese cars.
An increase in the price of oil increases the opportunity cost of resources, reduces productivity of any oil-based technology, and shrinks the production possibility frontier.

[@PunmasterSTP]

@@Newpr3toriaI think there can be some differences between technology and trade. If you have access to better technology, then you might be able to make more efficient use of resources, whether you acquire all of the resources domestically or trade internationally.

[@bankspeete1057]

Deregulation=good

[@bankspeete1057]

@@DabroodThompson Government=bad

[@PunmasterSTP]

I think a lot of the time that's true, though there still needs to be some level of regulation. A functioning society needs to have stuff like a police force and a military.

[@KilluaZoldyck-qx9jf]

This is khan academy...Did you steal this video?

[@mousamsubedi9033]

There more content to it than khan academy