Aggregate demand is used to show the long run effects of price on equilibrium, but how is price a long run concept and interest a short run one ?. I see price fluctuating on a daily basis, interest rates on the other hand fluctuate on a quarterly basis.

Forgive the simplicity of my doubt, I'm an Econ undergrad student. But these concepts were never clearly elucidated in class so I thought of taking to the internet where experts could help clear my doubts.


closed as unclear what you're asking by Giskard, Adam Bailey, Herr K., EnergyNumbers, london Dec 3 '17 at 18:56

Please clarify your specific problem or add additional details to highlight exactly what you need. As it's currently written, it’s hard to tell exactly what you're asking. See the How to Ask page for help clarifying this question. If this question can be reworded to fit the rules in the help center, please edit the question.

  • $\begingroup$ You're going to need to give some context as to who/where it is said that "price is a long run concept". On top of that, interest rate is a type of price, so what exactly is the claim that price and interest rate are long run/short run? $\endgroup$ – Kitsune Cavalry Dec 4 '17 at 1:46

Browse other questions tagged or ask your own question.