Here is the demand forecast for 1998.

And those who have jobs are being paid more,

And so, for any given price point, the demand would increase.

If we lower the price of a product, that will raise the quantity demanded of that product.

I'd rather have than just getting more of this thing right over here

This guy needs less cash, so it lowers demand.

And so essentially, it will shift, it will change the entire demand curve.

And if there's more cash in the banking system this guy right over here needs less

And so if income goes up for this laptop, the demand will increase.

So, income goes up, then that increases demand.

If we talk about an actual quantity, we should say the quantity demanded.

So, it would shift the demand curve to the right or it would increase demand.

So income goes down, demand goes up.

And I had this captured market. You didn't need contracts.

And then more people buy.

So in that case, even though the money supply is huge, or a lot larger than it was, people aren't expressing demand.

So this demand curve will also have the same shape from the top left to the bottom right it satisfies the law of demand.

Or another way to think of it is, is this entire demand curve.

'What can I do to increase the number of employees?'

When we hold everything else equal, we're moving along a given demand curve.

They decide to sell their house.

The price reflects the demand.

The lust denies the need.

And then the last one we'll talk about

This is the total numbers of cupcakes all of the factories in the market can produce.

When everything else is equal and you're only changing price, you're not changing demand.

Well, it has to do with Gresham's law of economics.

It puts pressure on water demand.

So we'll put price in the vertical axis and we'll put quantity demanded in the horizontal axis.

Let me write that in green.

Scenario E, I raise it to 10.

And then our short run aggregate supply might look something like this, aggregate supply in the short run.

Over that period you are going to double your demand.

Even the new Jack 2 field in the gulf of Mexico would only supply a few months of domestic demand.

Actually, we're going to start with aggregate demand and then start talking about aggregate supply.

That's how they create value, is by slamming things together.

Well for the price of anything to increase, what has to happen?

So it's now at 4 and then that kills off a lot of the demand.

At any given price point, the quantity demanded will go up.

So I get to 8 now.

Now you can see some of the reasons why I'm optimistic.

And there is a little bit of a negative feedback, if price goes up.

Supply is relative to demand.

It just tells us that if we raise the price of a product, that will lower the quantity demanded for the product.

This puts pressure on food demand.