Introduction This chapter develops the IS-LM model,the theory that yields the aggregate demand curve. We focus on the short run and assume the price level is fixed. CHAPTER 10 Aggregate Demand I slide 4CHAPTER 10 Aggregate Demand I slide 4 Introduction ▪ This chapter develops the IS-LM model, the theory that yields the aggregate demand curve. ▪ We focus on the short run and assume the price level is fixed. 1