Pick an economic episode to see the AD, SRAS, and LRAS curves, plus the resulting equilibrium and policy response.
SR equilibrium: AD = SRAS | LR equilibrium: AD = SRAS = LRAS
Output Y
$22T
Price level P
100
Output gap
0%
Inflation pressure
Neutral
The economy is at long-run equilibrium. AD intersects both SRAS and LRAS at potential output Ȳ = $22T. There is no output gap and no inflation pressure.
Watch how the economy adjusts after a shock. Step through Phase 0 → 1 → 2 → 3 to see the SR-to-LR transition.