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== The Model ==
The AD-IA model is a Keynesian method used to explain economic fluctuations. Essentially, this model is used to show undergraduate students how shifts in demand or shocks to prices can effect real GDP around potential. The model assumes that when inflation rises the interest rate rises (monetary policy rule). It also assumes that when real GDP exceeds potential, there is upward pressure on the inflation rate and vice versa.
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== More Advanced ==
This model is further advanced in higher levels of undergraduate studies.
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== Related Models ==
[[IS-LM]]
[[Real_Business_Cycle_Theory]]
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== See Also ==
[[Monetary_policy]]
[[Category:Macroeconomics]]
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