After reading this chapter, you should be able to:

1. Explain the relationship between short-run aggregate supply and long-run aggregate supply.
2. Discuss how to apply the "extended" (short-run/long-run) AD-AS model to inflation, recessions, and economic growth.
3. Explain the short-run trade-off between inflation and unemployment (the Phillips Curve).
4. Discuss why there is no long-run trade-off between inflation and unemployment.
5. Explain the relationship between tax rates, tax revenues, and aggregate supply.