JC Economics Tuition Notes
AS-AD Models and
National Income Determination

In this Macroeconomic chapter of National Income Determination, our economics tuition will examine how the AD-AS (Aggregate Demand-Aggregate Supply) Model is set and how it can be used to understand how the national income equilibrium is attained. From the Aggregate Demand (AD) side, it is imperative to study the specific components, like consumption, investment, government expenditure and net exports. The intersection of the Aggregate Demand and Aggregate Supply curves will determine the equilibrium of national income, which measures the general price level and national income (or real Gross Domestic Product). The understanding of this chapter will become an important basis for you to understand the economic indicators and how governments implement policies to achieve specific aims.