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.

This online resource has been set up for educational purposes.All rights are reserved by the various websites.

For further clarification, please email colin@mrmc.com.sg

Brief description: Classical economists believe that in the short run the aggregate supply curve will slope upwards, but in the long run will be vertical. Equilibrium will be where aggregate demand equals supply.

Detailed description: In the short run it is possible for the economy to expand beyond full employment, but this will cause the price level to rise and in the long run the economy will return automatically to full employment, but at a higher price level. This results in a vertical long run aggregate supply curve.