Class 06   Aggregate Supply And Demand
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Class 06 Aggregate Supply And Demand

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Class 06   Aggregate Supply And Demand Class 06 Aggregate Supply And Demand Presentation Transcript

  • Macro Economics
    The real driver behind the Housing Bubble, current Unemployment, and the rise (and fall) of American economic supremacy
    Prof. Jeff Takle
    (857) 277-9050 | jeff.takle@gmail.com
  • Measuring an Economy
    Take what we’ve learned so far, and start applying it to a national economy
  • Calculate the Real GDP per capita
    CPI of 201.6 = 201.6% the price level of base year (1982) = 2.016
    Use the following equation: Real GDP = Nominal GDP / CPI
    Did Real GDP go “up” or “down” from 2007 – 2009?
    $6.5
    $6.7
    $6.6
    $22,259
    $21,170
    $21,812
  • Real GDP over the Last 80 Years
  • Economic Indicators
    Leading, coincident, and lagging
  • Leading Indicators
    13,930  7,062 = 49%
    380  42 = 89%
    1900
    2010
  • Coincident Indicators
  • Lagging Indicators
    Federal Interest Rate
  • Aggregate Supply & Demand for an Economy
    Pretty close to what we already learned, but for “countries”
  • Aggregate Supply & Demand
    150
    100
    Price level
    50
    Real GDP
    (trillions of 2000 dollars)
    0
    2
    6
    8
    12
    16
    4
    10
    14
  • Supply and Demand Curves are Shifting
  • Government Policies & Their Effects on the Economy
    Can you feel the excitement?
    2min 40sec
    http://www.youtube.com/watch?v=UHes9WgieIo
  • Demand-side Economics
    The Democratic Party generally supports “demand-side” economics, using government spending to artificially increase demand, prices, and GDP.
    What’s the cost/risk?
    150
    100
    Price level
    50
    Real GDP
    (trillions of 2000 dollars)
    0
    2
    6
    8
    12
    16
    4
    10
    14
  • Supply-side Economics
    The Republican Party generally supports “supply-side” economics, using tax cuts to spur production, decrease prices, and increase GDP.
    What’s the cost/risk?
    150
    100
    Price level
    50
    Real GDP
    (trillions of 2000 dollars)
    Demand-side versus Supply-side
    Which one is better?
    0
    2
    6
    8
    12
    16
    4
    10
    14
  • Quiz Preparations