Phillips Curve

• Change in AD: Move along the curve

• Change in AS: Shift the curve

Loanable Funds

• Demand = Borrowers

• Supply = Lenders

• Crowding Out Effect: An increase in GS leads to an increase in demand for loans, causing higher interest rates and less business investment

Economic Growth

• Increase in investments (AD shift to the right) will lead to an increase in AS and LRAS in the long-run.

• Same shifters as PPC: Change in Resources and Change in Technology