Home › IB Diploma Economics › Chapter 15
IB Diploma · Economics · Chapter 15
Ch 15 3.2 Aggregate demand and aggregate supply: complete notes
Neat, exam-ready notebook-style notes for Ch 15 3.2 Aggregate demand and aggregate supply, following the IB Diploma syllabus, SL and HL. This chapter is part of the complete Economics Notes for IB Diploma Students (SL and HL): All 30 Topics.
Test yourself: Chapter 15 online MCQ test, free: 10 questions, 15 minutes, instant score and solutions →
Free preview: Ch 15 3.2 Aggregate demand and aggregate supply notes
A quick look at the chapter from our IB Diploma Economics notes. The full chapter notes have the detailed explanations, diagrams and practice questions with answers.
Topics in this chapter
- What you must be able to do
- Aggregate demand (AD) AO2 AO4
- Why the AD curve slopes downward
- Determinants of AD and shifts of AD AO2 AO4
- Short-run aggregate supply (SRAS) AO2 AO4
- Determinants of SRAS (shift factors)
- Alternative views of aggregate supply AO2 AO4
- Inflationary and deflationary (recessionary) gaps
- Equilibrium: monetarist / new classical AO2 AO4
- Automatic adjustment to full employment
- Equilibrium: the Keynesian model AO2 AO4
- Shifts of LRAS and of the Keynesian AS curve AO2 AO4
- Assumptions and implications of the two models AO3
“I can” checklist: what you must be able to do
- I can define AD, SRAS, LRAS and potential output, and draw the AD curve.
- I can state the components of AD and calculate AD from data.
- I can explain how changes in confidence, interest rates, wealth, taxes, debt, expectations, technology, priorities, foreign income, exchange rates and trade policies shift AD.
- I can draw and explain SRAS and its shifts (costs of factors, indirect taxes).
- I can draw the monetarist/new classical LRAS and the Keynesian AS curve, and mark recessionary and inflationary gaps.
- I can explain shifts of LRAS and Keynesian AS: factors of production, technology, efficiency, institutions.
- I can draw short-run and long-run equilibrium and explain automatic adjustment and the natural rate of unemployment.
- I can explain why a deflationary gap may persist in the Keynesian model.
- I can evaluate the assumptions and implications of the two models.
What is inside the full chapter notes
- Concept notes with 8 worked examples (every number computed)
- About 17 AD/AS diagrams drawn from one fictional economy, Kelmoor
- Common mistakes and a "How to score" command-term box
- 12 Quick-check questions A-D, explained
- Paper 1 style (a) 10 + (b) 15 with mark scheme and markbands
- Paper 2 style data response (36 marks) with mark scheme
- Quick reference and "I can" checklist
What you get in the pack
- All 30 topics of IB Diploma Economics for students taking Standard Level or Higher Level (first assessment 2022): what economics is, demand, supply, market equilibrium, behavioural economics, elasticity, government intervention, externalities, public goods, asymmetric information, market power, equity, measuring economic activity, aggregate demand and supply, macroeconomic objectives, inequality and poverty, monetary policy, fiscal policy, supply-side policies, international trade, trade protection, economic integration, exchange rates, balance of payments, sustainable development, measuring development, growth and development strategies
- Every syllabus statement covered in order, each marked SL or HL, with clear notes, tables and diagrams drawn for these notes
- Every diagram the guide names, drawn and labelled, plus worked examples and model answers that show how to earn the marks
- Quick-check multiple-choice questions with explained answers, plus original Paper 1 (extended response), Paper 2 (data response) and, for HL, Paper 3 (policy) style questions with full mark schemes (no past-paper reprints)
- Common mistakes and a how-to-score command-term guide for every topic
- Quick-reference sheet and an "I can" checklist at the end of every topic
- Colour PDF and a black and white copy of every chapter for printing
- Independent notes for IB Diploma students; not endorsed by or affiliated with the International Baccalaureate Organization (IBO)
All chapters in this pack
- Ch 1 1.1-1.2 What is economics? and How do economists approach the world?
- Ch 2 2.1 Demand
- Ch 3 2.2 Supply
- Ch 4 2.3 Competitive market equilibrium
- Ch 5 2.4 Critique of the maximizing behaviour of consumers and producers
- Ch 6 2.5 Elasticity of demand
- Ch 7 2.6 Elasticity of supply
- Ch 8 2.7 Role of government in microeconomics
- Ch 9 2.8 Market failure: externalities and common pool resources
- Ch 10 2.9 Market failure: public goods
- Ch 11 2.10 Market failure: asymmetric information (HL)
- Ch 12 2.11 Market failure: market power (HL)
- Ch 13 2.12 The market's inability to achieve equity (HL)
- Ch 14 3.1 Measuring economic activity and illustrating its variations
- Ch 15 3.2 Aggregate demand and aggregate supply
- Ch 16 3.3 Macroeconomic objectives
- Ch 17 3.4 Economics of inequality and poverty
- Ch 18 3.5 Demand management: monetary policy
- Ch 19 3.6 Demand management: fiscal policy
- Ch 20 3.7 Supply-side policies
- Ch 21 4.1 Benefits of international trade
- Ch 22 4.2 Types of trade protection
- Ch 23 4.3 Arguments for and against trade control and protection
- Ch 24 4.4 Economic integration
- Ch 25 4.5 Exchange rates
- Ch 26 4.6 Balance of payments
- Ch 27 4.7 Sustainable development
- Ch 28 4.8 Measuring development
- Ch 29 4.9 Barriers to economic growth and/or economic development
- Ch 30 4.10 Economic growth and/or economic development strategies