Chapter 15 aggregate demand/aggregate supply: over the long-run, real gdp grows about 3. 2% per year on avg. Real gdp per capita has grown about 1. 8% per year due to innovation & more resources. In the long-run, rgdp is only affected by supply factors, not demand. In the long-run y = yn. (natural rate of output): this occurs when u =un. In the short run, gdp fluctuates around its trend ie. y may = yn: recessions: yun, depressions: severe recessions (very rare, expansions: when y>yn. Concern is rising inflation, but u