Neoclassical economists emphasize Say’s law, which holds that supply creates its own demand. The downward-sloping aggregate demand (AD) curve shows the relationship between the price level for outputs and the quantity of total spending in the economy.

Keynesian economists emphasize Keynes’ law, which holds that demand creates its own supply. The upward-sloping short run aggregate supply (SRAS) curve shows the positive relationship between the price level and the level of real GDP in the short run.

aggregate demand/aggregate supply model — a model that shows what determines total supply or total demand for the economy, and how total demand and total supply interact at the macroeconomic level. neoclassical economists — economists who generally emphasize the importance of aggregate supply in determining the size of the macroeconomy over the long run. aggregate demand (AD) — the amount of total spending on domestic goods and services in an economy. aggregate demand (AD) curve — the total spending on domestic goods and services at each price level.