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AS-AD Model at a glance: AS-Ad stands for aggregate supply and aggregate demand. It is a macroeconomic model that explains the output and price level through aggregate supply and demand. This theory was presented by John Maynard Keynes. This model is a combination of classical model and Keynesian model. There are three different curves in this model. The aggregate demand curve, short run aggregate supply curve and short run aggregate supply curve. When the short run aggregate demand curve intersects with the aggregate demand curve, it is called equilibrium. This is considered to be highly realistic model of macroeconomics.
If the government spending is increased or if the taxes are reduced The AD curve shifts rightward. This leads to an increase in the demand for goods but firms cannot increase the supply immediately. While providing the AS-AD model with inflation assignment help one has to keep all the above factors on mind.
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