Macroeconomics: The Theory of Aggregate Supply and Aggregate Demand

THE THEORY OF AGGREGATE SUPPLY AND AGGREGATE DEMAND
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The Theory of Aggregate Supply and Aggregate Demand
Introduction
The theory of aggregate supply and aggregate demand has been contested over the years by scholars and experts alike. This is because of the many schools of thoughts that are being developed in several universities and colleges around the world. The likes of Barro have suggested that the aggregate supply and aggregated demand theories are not satisfying at all and therefore should not even be used for training students in business schools and colleges. According to Barro, there are two possible categories that can be seen in the aggregate demand and aggregate supply theory, which include the inconsistent category and the convenient category.
Barrow`s criticisms
However, based on the theory`s objectivity, it can be argued that Barrow is wrong and that the aggregate supply and demand theory is a sustainable theory. It can support itself against the claims by the likes of Barrow that it is inconsistent. This is because Barrow has used erroneous details of basic information in his arguments. The AS and DS framework can well be used for teaching students and everyone who majors in business economics without compromising any information or scholastic excellence.
According to barrow, the only two consistent models which can be valid are the ones that allow the interactions between real variables and monetary variables. In essence, this is a misleading argument. Barrow him...