What is represented on the horizontal axis of the aggregate demand/aggregate supply model?

In the aggregate demand/aggregate supply model, the horizontal axis represents Real GDP. This reflects the total output of an economy, measured at constant prices, allowing economists to analyze economic fluctuations over time. Real GDP provides a gauge for understanding the actual volume of goods and services produced in the economy, excluding the effects of inflation or deflation.

By plotting Real GDP on the horizontal axis, the model helps illustrate how aggregate demand and aggregate supply interact to determine the equilibrium level of output and the price level in the economy. Understanding this relationship is crucial in evaluating economic performance and making policy decisions, as changes in aggregate demand or supply can lead to shifts in real GDP, impacting overall economic health.