The aggregate demand and aggregate supply is a very important part of macroeconomics. The model is a combination of two markets namely service, goods and labor market. The service together with goods market is referred to as aggregate demand model, and the labor market is called the aggregate supply model.

It helps in explaining the functioning of price level and total output in the labor market. The AS model involves the short run aggregate supply and long run aggregate supply. Additionally, there are few more things that are associated with learning and understanding of the AS model.

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