Principles of Macroeconomics / Unit 18 MAC 1723 short lesson, about 20 seconds
Short Run Against Long Run
Captions available
The idea
In the short run wages and prices are sticky, so demand can move output. In the long run they are flexible, so output returns to potential and demand moves only the price level.
In practice
Units nine and ten are the same economy told over two horizons.
Where people slip
A question naming a horizon is telling you which curve is doing the work.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
Unlocks
- Nothing yet depends on this.
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