This blog has been created to provide an area for economics students to read about how economics impacts daily life. It is especially useful for students to understand the application of macroeconomics as communicated through the media and governmental websites.

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Brief description: Classical economists believe that in the short run the aggregate supply curve may be upward sloping, but in the long run it will be vertical.

Detailed description: In the short run an increase in aggregate demand may lead to an increase in output, but there will also be an increase in the price level. As firms realise that there has not been a real increase in demand, they will once again reduce output and the economy will tend back to the full employment level of output.