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6. How do we find national equilibrium?
6. How do we find national equilibrium?
6. How do we find national equilibrium?
6. How do we find national equilibrium?
6. How do we find national equilibrium?
6. How do we find national equilibrium?
6. How do we find national equilibrium?
6. How do we find national equilibrium?
6. How do we find national equilibrium?
6. How do we find national equilibrium?
6. How do we find national equilibrium?
6. How do we find national equilibrium?
6. How do we find national equilibrium?
6. How do we find national equilibrium?
6. How do we find national equilibrium?
6. How do we find national equilibrium?
6. How do we find national equilibrium?
6. How do we find national equilibrium?
6. How do we find national equilibrium?
6. How do we find national equilibrium?
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6. How do we find national equilibrium?

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Aggregate Demand, Aggregate Supply

Aggregate Demand, Aggregate Supply

Published in: Technology, Economy & Finance
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  • 1. How can we analyze economic fluctuations?
    Aggregate Demand and Aggregate Supply
  • 2. The History of Recessions in the US
  • 3. Aggregate Demand
    REAL GDP
    AND
    PRICE LEVELS
    Aggregate demand curve shows the relationship between:
    Aggregate spending on domestic output (X AXIS)
    Average price levels (Y AXIS)
  • 4. What does this look like?
  • 5. Why is it downward sloping?
    Foreign Sector Substitution effect:
    If prices rise domestically
    Look internationally
    If prices fall domestically
    Buy more domestically
  • 6. Why is it downward sloping?
    Interest rate effect:
    If prices rise 
    Need to borrow more
    Interest rates rise
    I falls
    C falls
    If prices fall 
    Need to borrow less
    Interest rates fall
    I increases
    C increases
  • 7. Why is it downward sloping?
    The Wealth effect:
    If price rises 
    The purchasing power falls
    The quantity of domestic output demanded falls
  • 8. SHIFTs IN THE AD
    Consumption will…
    Investment will…
  • 9. AD SHIFTS: G and NX (X-M)
    Government spending will
    Net Exports
  • 10. Representations of Shifts in the AD
    Increase of AD (right)
    Decrease in AD (left)
  • 11. Governmental Policies
    Taxes
    Can increase or decrease C and I
    Government Spending
    Increase G
    Increase Money
    More C and More I
    Decrease Money
    Less C and Less I
    Fiscal Policy
    Monetary Policy
  • 12. Presentation Guidelines
    1. Establish roles: (see back board) 2 min.
    2. Read your excerpt and fill in WS. 5 min.
    3. Find another credible source for info. 5 min.
    4.Create your presentation of information and include: 15 min.
    Description of your concept (50 points)
    Graphs or image of your concept (20 points)
    Jingle, rap, acronym, or dance to remember your concept (20 points)
    Creativity (10 points)
  • 13. Aggregate Supply
    PL
    And
    Real GDP
    Shows the relationship between average price level and the domestic output produced
  • 14. SHORT RUN VS. LONG RUN
    Input $ do not adjust to changes in the PL
    Keynesian school
    Input $ are flexible and adjust to changes in PL
    Classical school
    SHORT RUN: PD. OF TIME WITH STICKY PRICES (COSTS) AND WAGES
    LONG RUN: PD. OF TIME WHEN PRICES (COSTS) AND WAGES ARE FLEXIBLE
  • 15. Short-Run Aggregate Supply (SRAS)
    INPUT COSTS ARE STUCK AT A PRE-DETERMINED LEVEL
    As prices increase 
    Firms produce more for a greater profit
    As prices decrease
    sales will fall, and producers produce less
    PL
    SRAS
    GDPR
  • 16. HOW TO SHIFT THE SRAS
    • INPUT PRICES or COSTS such as WAGES
    • 17. ECONOMIC GROWTH
    • 18. GOVERNMENT REGULATION
  • INCREASE AND DECREASE IN SRAS
    DECREASE IN INPUT COSTS
    INCREASE IN INPUT COSTS
    SRAS1
    PL
    SRAS
    PL
    SRAS1
    PL
    SRAS
    GDPR
    GDPR
  • 19. Long-Run Aggregate Supply (LRAS)
    PL
    LRAS
    GDPR
    Yf
  • 20. HOW TO SHIFT THE LRAS
    LIKE THE PPF
    In the Long run, we are operating at Full Potential so…
    CHANGE IN TECHNOLOGY
    CHANGE IN LABOR PRODUCTIVITY
    CHANGE IN CAPITAL
  • 21. THE DIFFERENT MODELS…
    http://apecon.us/aggregatesupplykeynesianclassical2.swf

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