Macroeconomics › Section K · The aggregate demand and aggregate supply model › Topic K.6
Keynes' law and Say's law
The short-run aggregate supply curve has a flat end, a steep end and a middle. Where aggregate demand crosses it tells you whether Keynes' law or Say's law is the better guide, and which policy questions matter most for the economy right now.
In this topic
- Both laws in one diagram
- The Keynesian zone
- The neoclassical zone
- The intermediate zone
- Worked example: one AD shift in three zones
- Using the zones as a diagnosis
- Worked example: diagnosing two economies
- Self-correction: how fast?
- The 2020 recession: supply or demand?
- Common mistakes to avoid
- Key takeaways
This topic is part of Wuanberri Pro. Checking your access…