Demand Curve and Supply Curve
Literature Review
Demand and supply have been generalized to explain macroeconomic variables in a market economy. The Aggregate Demand-Aggregate Supply model is the most direct application of supply and demand to macroeconomics. Compared to microeconomic uses of demand and supply, different theoretical considerations apply to such macroeconomic counterparts as aggregate demand and aggregate supply. The AD-AS or Aggregate Demand-Aggregate Supply model is a macroeconomic model that explains price level and output through the relationship of aggregate demand and aggregate supply. It is based on the theory of John Maynard Keynes presented in his work “The General Theory of Employment, Interest, and Money”. It is one of the primary simplified representations in the modern field of macroeconomics and is used by a broad array of economists, from libertarian, monetarist supporters of laissez-faire, such as Milton Friedman to Post-Keynesian supporters of economic interventionism, such as Joan Robinson.
Brief history of demand curve and supply curve
According to Hamid S. Hosseini, the power of supply and demand was understood to some extent by several early Muslim economists, such as Ibn Taymiyyah who illustrates- “If desire for goods increases while its availability decreases, its price rises. On the other hand, if availability of the good increases and the desire for it decreases, the price comes down”. In 1691, John Locke worked on some considerations of the consequences of the lowering of interest and the raising of the value of money. It includes an early and clear description of supply and demand and their relationship. In this description demand is rent: “The price of any commodity rises or falls by the proportion of the number of buyer and sellers” and “that which regulates the price of goods is nothing else but their quantity in proportion to their rent.” The phrase "supply and demand" was first used by James Denham-Steuart in his Inquiry into the “Principles of
Demand and supply have been generalized to explain macroeconomic variables in a market economy. The Aggregate Demand-Aggregate Supply model is the most direct application of supply and demand to macroeconomics. Compared to microeconomic uses of demand and supply, different theoretical considerations apply to such macroeconomic counterparts as aggregate demand and aggregate supply. The AD-AS or Aggregate Demand-Aggregate Supply model is a macroeconomic model that explains price level and output through the relationship of aggregate demand and aggregate supply. It is based on the theory of John Maynard Keynes presented in his work “The General Theory of Employment, Interest, and Money”. It is one of the primary simplified representations in the modern field of macroeconomics and is used by a broad array of economists, from libertarian, monetarist supporters of laissez-faire, such as Milton Friedman to Post-Keynesian supporters of economic interventionism, such as Joan Robinson.
Brief history of demand curve and supply curve
According to Hamid S. Hosseini, the power of supply and demand was understood to some extent by several early Muslim economists, such as Ibn Taymiyyah who illustrates- “If desire for goods increases while its availability decreases, its price rises. On the other hand, if availability of the good increases and the desire for it decreases, the price comes down”. In 1691, John Locke worked on some considerations of the consequences of the lowering of interest and the raising of the value of money. It includes an early and clear description of supply and demand and their relationship. In this description demand is rent: “The price of any commodity rises or falls by the proportion of the number of buyer and sellers” and “that which regulates the price of goods is nothing else but their quantity in proportion to their rent.” The phrase "supply and demand" was first used by James Denham-Steuart in his Inquiry into the “Principles of
References: Book | Macroeconomics (6th), N. Gregory Mankiw. | | Principles of Economics, McGraw-Hill ,New York, 1997b. |