What is "according to the dynamic ad-as model?

The dynamic AD-AS model is a macroeconomic model that explains the behavior of the economy over time, specifically the relationship between inflation, unemployment, and economic growth. This model consists of two curves: the aggregate demand (AD) curve and the aggregate supply (AS) curve. The AD curve represents the level of total spending in the economy, while the AS curve represents the level of output produced in the economy.

According to the dynamic AD-AS model, changes in the AD curve lead to changes in equilibrium output and prices. In the short run, an increase in AD leads to an increase in output, but also in prices. However, in the long run, the AS curve is more elastic, meaning that changes in AD result in changes in prices, but not in output. In the long run, output is determined by the factors of production, such as capital and labor, rather than the level of spending.

The dynamic AD-AS model also takes into account the effects of shifts in the AS curve, such as changes in production costs or changes in the availability of resources. These shifts can impact the level of output and prices in the economy. Additionally, changes in monetary or fiscal policy can also affect the AD curve, leading to changes in equilibrium output and prices.

Overall, the dynamic AD-AS model provides insights into the behavior and interaction of key macroeconomic variables over time, and can be used to analyze the impact of various policies and economic shocks.