From 1929 to 1933, the U.S. economy moved down the short-run aggregate supply curve as the aggregate price level fell. In contrast, from 1979 to 1980 the U.S. economy moved up the aggregate demand curve as the aggregate price level rose. In each case, the cause of the movement along the curve was a shift of the other curve. In 1929–1933, it was a leftward shift of the aggregate demand curve—a major fall in consumer spending. In 1979–1980, it was a leftward shift of the short-run aggregate supply curve—a dramatic fall in short-run aggregate supply caused by the oil price shock.

So to understand the behavior of the economy, we must put the aggregate supply curve and the aggregate demand curve together. The result is the AD–AS model, the basic model we use to understand economic fluctuations.