Shifts versus movements along the Aggregate Supply curve. The Recessionary and Inflationary gaps Self-correction in a Laissez Faire economy.
Diagrams are important here.
Supply side policies. Economic explanation and criticisms using the AS-AD diagram. The new, expenditure multiplier formula. The new formula makes the multiplier smaller in magnitude as compared to the one calculated in Chapter 9. Note the formula is different for government spending and for fixed taxes.