Macro 12

2. Lecture 12 Macroeconomics Chapter 12

3. Macroeconomics Business Fluctuations Aggregate Supply & Demand Chapter 13

4. Real GDP Growth Rate

5. Real GDP Growth Rate 3.2%

6. Civilian Unemployment Rate

7. Civilian Unemployment Rate 3.2%

9. Aggregate Demand

10. Aggregate Demand Aggregate Supply

11. Aggregate Demand Aggregate Supply Model

12. Aggregate Demand Aggregate Supply Model AD-AS Model

14. Mv = PYR

15. Mv = PYR Rates

16. Mv = PYR Rates M + v = P +YR

17. M + v = P +YR M + v = Inﬂation + Real Growth 5% + 0% = Inﬂation + 0%

18. Aggregate Demand

19. 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% -2% 0% 2% 4% 6% Aggregate Demand

20. 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% -2% 0% 2% 4% 6% Aggregate Demand P Inﬂation Rate

21. 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% -2% 0% 2% 4% 6% Aggregate Demand P Inﬂation Rate Y - Real GDP Growth Rate

22. 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% -2% 0% 2% 4% 6% Aggregate Demand AD = M +V = 5%P Inﬂation Rate Y - Real GDP Growth Rate

23. 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% -2% 0% 2% 4% 6% Aggregate Demand AD = M +V = 5%P Inﬂation Rate Y - Real GDP Growth Rate 5% = P +Y

28. 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% -2% 0% 2% 4% 6% Aggregate Demand AD = M +V = 5%P Inﬂation Rate Y - Real GDP Growth Rate 5% = P +Y AD = 7%

37. Quiz

38. Quiz If %∆M (Money)is growing at 4% and %∆V (Velocity) is growing at 2%, create a graph to show the aggregate demand curve for the growth rate for %∆P (inﬂation) and %∆Y (GDP).

40. %∆M + %∆V = 6% = %∆P + %∆Y

41. %∆M + %∆V = 6% = %∆P + %∆Y

42. %∆M + %∆V = 6% = %∆P + %∆Y

43. %∆M + %∆V = 6% = %∆P + %∆Y %∆P Inﬂation π

44. %∆M + %∆V = 6% = %∆P + %∆Y %∆P Inﬂation π %∆Y GDP

45. %∆M + %∆V = 6% = %∆P + %∆Y 6%0% %∆P Inﬂation π %∆Y GDP

46. %∆M + %∆V = 6% = %∆P + %∆Y 6% 6%0% 0% %∆P Inﬂation π %∆Y GDP

50. %∆M + %∆V = 6% = %∆P + %∆Y 6% 6%0% 0% %∆P Inﬂation π %∆Y GDP Aggregate Demand

55. Aggregate Supply Curve

56. Aggregate Supply Curve Two Curves

57. Aggregate Supply Curve Two Curves Short Run

58. Aggregate Supply Curve Two Curves Short Run Long Run

59. Two Supply Curves

60. Two Supply Curves Short Run

61. Two Supply Curves Short Run Long Run

62. Short Run

63. Short Run Adrenaline

64. Short Run Adrenaline Give 110%

65. Short Run Adrenaline Give 110% Push to exceed normal capacity

66. Long Run

67. Long Run Run out of Adrenaline

68. Long Run Run out of Adrenaline Fall back to normal

69. Long Run Run out of Adrenaline Fall back to normal Cannot do 110% forever

70. Long Run Run out of Adrenaline Fall back to normal Cannot do 110% forever unless.....

71. Long Run Supply Curve

72. Long Run Supply Curve New Capital

73. Long Run Supply Curve New Capital Human

74. Long Run Supply Curve New Capital Human Physical

75. Long Run Supply Curve New Capital Human Physical Intellectual

76. Long Run Supply Curve New Capital Human Physical Intellectual Financial

77. Long Run Supply Curve New Capital Human Physical Intellectual Financial Cultural

78. Price Level Quantity of Output Two Supply Curves

79. Price Level Quantity of Output Two Supply Curves Short-Run Aggregate Supply

80. Price Level Quantity of Output Two Supply Curves Short-Run Aggregate Supply Long-Run Aggregate Supply

81. Price Level Quantity of Output Two Supply Curves Long-Run Aggregate Supply

82. Price Level Quantity of Output Two Supply Curves Long-Run Aggregate Supply Price change does not affect the quantity of goods and services

83. Price Level Quantity of Output Two Supply Curves Long-Run Aggregate Supply Price change does not affect the quantity of goods and services P

87. New Capital Price Level Quantity of Output Two Supply Curves

88. New Capital Human Price Level Quantity of Output Two Supply Curves

89. New Capital Human Physical Price Level Quantity of Output Two Supply Curves

90. New Capital Human Physical Intellectual Price Level Quantity of Output Two Supply Curves

91. New Capital Human Physical Intellectual Financial Price Level Quantity of Output Two Supply Curves

92. New Capital Human Physical Intellectual Financial Cultural Price Level Quantity of Output Two Supply Curves

93. New Capital Human Physical Intellectual Financial Cultural Price Level Quantity of Output Two Supply Curves LRAS1 Y1

94. New Capital Human Physical Intellectual Financial Cultural Price Level Quantity of Output Two Supply Curves LRAS1 Y1 LRAS2 Y3

95. New Capital Human Physical Intellectual Financial Cultural Price Level Quantity of Output Two Supply Curves LRAS1 Y1 LRAS2 Y3 LRAS3 Y3

97. Price Level Quantity of Output Two Supply Curves LRAS1 Y1

98. Price Level Quantity of Output Two Supply Curves LRAS1 Y1 P1

99. New Capital Human Physical Intellectual Financial Cultural Price Level Quantity of Output Two Supply Curves LRAS1 Y1 P1

100. New Capital Human Physical Intellectual Financial Cultural Price Level Quantity of Output Two Supply Curves LRAS1 Y1 LRAS2 Y3 P1

101. New Capital Human Physical Intellectual Financial Cultural Price Level Quantity of Output Two Supply Curves LRAS1 Y1 LRAS2 Y3 P1 P2

102. New Capital Human Physical Intellectual Financial Cultural Price Level Quantity of Output Two Supply Curves LRAS1 Y1 LRAS2 Y3 LRAS3 Y3 P1 P2

103. New Capital Human Physical Intellectual Financial Cultural Price Level Quantity of Output Two Supply Curves LRAS1 Y1 LRAS2 Y3 LRAS3 Y3 P1 P2 P3

104. Price Level Real GDP orY AD- AS Model

105. Price Level Real GDP orY AD- AS Model Aggregate Demand

106. Price Level Real GDP orY AD- AS Model Aggregate Demand AD Shape - Slope Down Wealth Effect Interest Effect Exchange Effect Shift Consumption Investment Government Net Exports Money Supply

107. Price Level Real GDP orY AD- AS Model Aggregate Demand Long Run Aggregate Supply AD Shape - Slope Down Wealth Effect Interest Effect Exchange Effect Shift Consumption Investment Government Net Exports Money Supply

108. Price Level Real GDP orY AD- AS Model Aggregate Demand Long Run Aggregate Supply LRAS Shape -Vertical Capacity ﬁxed Shift Physical Financial Human Intellectual Cultural AD Shape - Slope Down Wealth Effect Interest Effect Exchange Effect Shift Consumption Investment Government Net Exports Money Supply

109. Price Level Real GDP orY AD- AS Model Aggregate Demand Short Run Aggregate Supply Long Run Aggregate Supply LRAS Shape -Vertical Capacity ﬁxed Shift Physical Financial Human Intellectual Cultural AD Shape - Slope Down Wealth Effect Interest Effect Exchange Effect Shift Consumption Investment Government Net Exports Money Supply

110. Price Level Real GDP orY AD- AS Model Aggregate Demand Short Run Aggregate Supply Long Run Aggregate Supply LRAS Shape -Vertical Capacity ﬁxed Shift Physical Financial Human Intellectual Cultural SRAS Shape - Slope Up Sticky Wages Sticky Prices Misperceptions Shift Physical Financial Human Intellectual Cultural Expectations AD Shape - Slope Down Wealth Effect Interest Effect Exchange Effect Shift Consumption Investment Government Net Exports Money Supply

111. Price Level Quantity of Output P1 AD- AS Model Aggregate Demand Short Run Aggregate Supply Y1

114. Price Level Quantity of Output P1 AD- AS Model Aggregate Demand Short Run Aggregate Supply Y1 P2

115. Price Level Quantity of Output P1 AD- AS Model Aggregate Demand Short Run Aggregate Supply Y1 P2

116. Price Level Quantity of Output P1 AD- AS Model Aggregate Demand Short Run Aggregate Supply Y1 Y2 P2

117. Price Level Quantity of Output P1 AD- AS Model Aggregate Demand Short Run Aggregate Supply Y1 Y2 P2 Long Run Aggregate Supply

118. Price Level Quantity of Output P1 AD- AS Model Aggregate Demand Short Run Aggregate Supply Y1 Y2 P2 Long Run Aggregate Supply

119. Price Level Quantity of Output P1 AD- AS Model Aggregate Demand Short Run Aggregate Supply Y1 Y2 P2 Long Run Aggregate Supply P3

120. If workers see smaller numbers on their paycheck, their morale declines and they often take their anger out on their employers. In contrast, layoffs get the misery out the door.

121. Sticky Wages If workers see smaller numbers on their paycheck, their morale declines and they often take their anger out on their employers. In contrast, layoffs get the misery out the door.

122. Sticky Wages Better to cut wages or layoff? If workers see smaller numbers on their paycheck, their morale declines and they often take their anger out on their employers. In contrast, layoffs get the misery out the door.

124. NominalValues

125. NominalValues Change

126. NominalValues Change Rate of Change or % Change

127. NominalValues Change Rate of Change or % Change

128. NominalValues Change Rate of Change or % Change 2017 $150

129. NominalValues Change Rate of Change or % Change 2017 $150 2018 $200

130. NominalValues Change Rate of Change or % Change 2017 $150 2018 $200 Change $50

131. NominalValues Change Rate of Change or % Change 2017 $150 2018 $200 Change $50 Rate of Change or % Change 33%

133. Total Spending % Rate

134. Total Spending % Rate =

135. Total Spending % Rate = Inﬂation % Rate + Real GDP % Rate

136. Total Spending % Rate = Inﬂation % Rate + Real GDP % Rate 10% = 10% + 0%

137. Total Spending % Rate = Inﬂation % Rate + Real GDP % Rate 10% = 10% + 0% 10% = 5% + 5%

138. Total Spending % Rate = Inﬂation % Rate + Real GDP % Rate 10% = 10% + 0% 10% = 5% + 5% 10% = 0% + 10%

139. Total Spending Rate = Inﬂation Rate + Real GDP Growth Rate

140. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Total Spending Rate = Inﬂation Rate + Real GDP Growth Rate

141. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Inﬂation Rate Total Spending Rate = Inﬂation Rate + Real GDP Growth Rate

142. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Real GDP Growth Rate Inﬂation Rate Total Spending Rate = Inﬂation Rate + Real GDP Growth Rate

143. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Real GDP Growth Rate Inﬂation Rate Total Spending = 10% Total Spending Rate = Inﬂation Rate + Real GDP Growth Rate

147. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Real GDP Growth Rate Inﬂation Rate Total Spending = 10% Total Spending = 13% Total Spending Rate = Inﬂation Rate + Real GDP Growth Rate

151. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Real GDP Growth Rate Inﬂation Rate Total Spending = 10% Total Spending = 13% Total Spending = 6% Total Spending Rate = Inﬂation Rate + Real GDP Growth Rate

156. The graph below shows the US economy in long run equilibrium with a spending growth of 13 percent, a 9 percent inﬂation rate, and a 4 percent real GDP growth.

157. The graph below shows the US economy in long run equilibrium with a spending growth of 13 percent, a 9 percent inﬂation rate, and a 4 percent real GDP growth. Total Spending Rate = Inﬂation Rate + Real GDP Growth Rate 13% = 9% + 4%

162. The graph below shows the US economy in long run equilibrium with a spending growth of 13 percent, a 9 percent inflation rate, and a 4 percent real GDP growth. Step 1: Suppose that to reduce inflation the Fed permanently decreased money supply growth by 5 percent. Using the copy tool, show the short run effect this would have by shifting and labeling the appropriate curve(s). Plot the new short run equilibrium using the double drop line tool and label it Equilibrium 2. Total Spending Rate = Inflation Rate + Real GDP Growth Rate 13% = 9% + 4%

163. The graph below shows the US economy in long run equilibrium with a spending growth of 13 percent, a 9 percent inflation rate, and a 4 percent real GDP growth. Step 1: Suppose that to reduce inflation the Fed permanently decreased money supply growth by 5 percent. Using the copy tool, show the short run effect this would have by shifting and labeling the appropriate curve(s). Plot the new short run equilibrium using the double drop line tool and label it Equilibrium 2. Total Spending Rate = Inflation Rate + Real GDP Growth Rate 13% = 9% + 4% 8% = 4% + 4%

166. The graph below shows the US economy in long run equilibrium with a spending growth of 13 percent, a 9 percent inflation rate, and a 4 percent real GDP growth. Step 1: Suppose that to reduce inflation the Fed permanently decreased money supply growth by 5 percent. Using the copy tool, show the short run effect this would have by shifting and labeling the appropriate curve(s). Plot the new short run equilibrium using the double drop line tool and label it Equilibrium 2. Step 2: Show how the economy will adjust in the long run by shifting and labeling the appropriate curve(s). Plot the new long run equilibrium and label it Equilibrium 3. Total Spending Rate = Inflation Rate + Real GDP Growth Rate 13% = 9% + 4% 8% = 4% + 4%

167. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Real GDP Growth Rate Inﬂation Rate

168. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Real GDP Growth Rate Inﬂation Rate Total Spending = Inﬂation Rate + Real GDP Growth Rate 13% = 9% + 4%

173. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Real GDP Growth Rate Inﬂation Rate Total Spending = Inﬂation Rate + Real GDP Growth Rate 13% = 9% + 4% T.S. = 13%

182. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Real GDP Growth Rate Inflation Rate Total Spending = Inflation Rate + Real GDP Growth Rate 13% = 9% + 4% Reduce Money Growth Rate by 5% Reduces Inflation Rate from 9% to 4% 8% = 4% + 4% T.S. = 13%

187. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Real GDP Growth Rate Inflation Rate Total Spending = Inflation Rate + Real GDP Growth Rate 13% = 9% + 4% Reduce Money Growth Rate by 5% Reduces Inflation Rate from 9% to 4% 8% = 4% + 4% T.S. = 13% T.S. = 8%

196. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Real GDP Growth Rate Inflation Rate Total Spending = Inflation Rate + Real GDP Growth Rate 13% = 9% + 4% Reduce Money Growth Rate by 5% Reduces Inflation Rate from 9% to 4% 8% = 4% + 4% T.S. = 13% T.S. = 8% Recession

197. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Real GDP Growth Rate Inflation Rate Total Spending = Inflation Rate + Real GDP Growth Rate 13% = 9% + 4% Reduce Money Growth Rate by 5% Reduces Inflation Rate from 9% to 4% 8% = 4% + 4% Short Run 8% = 7% + 1% T.S. = 13% T.S. = 8% Recession

198. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Real GDP Growth Rate Inflation Rate Total Spending = Inflation Rate + Real GDP Growth Rate 13% = 9% + 4% Reduce Money Growth Rate by 5% Reduces Inflation Rate from 9% to 4% 8% = 4% + 4% Short Run 8% = 7% + 1% T.S. = 13% T.S. = 8% Recession

199. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Real GDP Growth Rate Inflation Rate Total Spending = Inflation Rate + Real GDP Growth Rate 13% = 9% + 4% Reduce Money Growth Rate by 5% Reduces Inflation Rate from 9% to 4% 8% = 4% + 4% Short Run 8% = 7% + 1% T.S. = 13% T.S. = 8%

203. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Real GDP Growth Rate Inflation Rate Total Spending = Inflation Rate + Real GDP Growth Rate 13% = 9% + 4% Reduce Money Growth Rate by 5% Reduces Inflation Rate from 9% to 4% 8% = 4% + 4% Short Run 8% = 7% + 1% T.S. = 13% T.S. = 8% Growth

204. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Real GDP Growth Rate Inflation Rate Total Spending = Inflation Rate + Real GDP Growth Rate 13% = 9% + 4% Reduce Money Growth Rate by 5% Reduces Inflation Rate from 9% to 4% 8% = 4% + 4% Short Run 8% = 7% + 1% T.S. = 13% T.S. = 8% Long Run 8% = 4% + 4% Growth

205. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Real GDP Growth Rate Inflation Rate Total Spending = Inflation Rate + Real GDP Growth Rate 13% = 9% + 4% Reduce Money Growth Rate by 5% Reduces Inflation Rate from 9% to 4% 8% = 4% + 4% Short Run 8% = 7% + 1% T.S. = 13% T.S. = 8% Long Run 8% = 4% + 4% Growth

207. Because prices are sticky going down, you cannot reduce inﬂation without having a temporary recession

208. Because prices are sticky going down, you cannot reduce inﬂation without having a temporary recession

209. Because prices are sticky going down, you cannot reduce inﬂation without having a temporary recession As the price level falls, spending increases back to capacity

212. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Real GDP Growth Rate Inﬂation Rate AD1

213. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Real GDP Growth Rate Inﬂation Rate AD1

214. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Real GDP Growth Rate Inﬂation Rate AD1 LRSA

217. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Real GDP Growth Rate Inﬂation Rate AD1 LRSA SRSA1

218. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Real GDP Growth Rate Inﬂation Rate AD1 LRSA SRSA1 AD2

221. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Real GDP Growth Rate Inﬂation Rate AD1 LRSA SRSA1 SRSA2 AD2

222. The graph below shows the US economy in long run equilibrium with a spending growth of 13 percent, a 9 percent inﬂation rate, and a 4 percent real GDP growth.

223. The graph below shows the US economy in long run equilibrium with a spending growth of 13 percent, a 9 percent inﬂation rate, and a 4 percent real GDP growth. Total Spending = 13%

224. Step 1: Suppose that to reduce inﬂation the Fed permanently decreased money supply growth by 5 percent. Using the copy tool, show the short run effect this would have by shifting and labeling the appropriate curve(s). Plot the new short run equilibrium using the double drop line tool and label it Equilibrium 2.

225. Step 1: Suppose that to reduce inﬂation the Fed permanently decreased money supply growth by 5 percent. Using the copy tool, show the short run effect this would have by shifting and labeling the appropriate curve(s). Plot the new short run equilibrium using the double drop line tool and label it Equilibrium 2. 1

226. Step 1: Suppose that to reduce inﬂation the Fed permanently decreased money supply growth by 5 percent. Using the copy tool, show the short run effect this would have by shifting and labeling the appropriate curve(s). Plot the new short run equilibrium using the double drop line tool and label it Equilibrium 2. Inﬂation 9% to 4% 1

227. Step 1: Suppose that to reduce inﬂation the Fed permanently decreased money supply growth by 5 percent. Using the copy tool, show the short run effect this would have by shifting and labeling the appropriate curve(s). Plot the new short run equilibrium using the double drop line tool and label it Equilibrium 2. Inﬂation 9% to 4% Push Down by 5% 1

230. Step 2: Show how the economy will adjust in the long run by shifting and labeling the appropriate curve(s). Plot the new long run equilibrium and label it Equilibrium 3. Inﬂation 9% to 4% 1 22

231. Step 2: Show how the economy will adjust in the long run by shifting and labeling the appropriate curve(s). Plot the new long run equilibrium and label it Equilibrium 3. Inﬂation 9% to 4% 1 22

232. Step 2: Show how the economy will adjust in the long run by shifting and labeling the appropriate curve(s). Plot the new long run equilibrium and label it Equilibrium 3. Inﬂation 9% to 4% 1 23 2

234. Graphing Quiz

235. Graphing Quiz

236. Graphing Quiz Total Spending Growth Rate is 20%

237. Graphing Quiz Total Spending Growth Rate is 20% Inﬂation Rate is 10%

238. Graphing Quiz Total Spending Growth Rate is 20% Inﬂation Rate is 10%

239. Graphing Quiz Total Spending Growth Rate is 20% Inﬂation Rate is 10% Reduce Money Growth Rate to 3%

240. Graphing Quiz Total Spending Growth Rate is 20% Inﬂation Rate is 10% Reduce Money Growth Rate to 3%

241. Graphing Quiz Total Spending Growth Rate is 20% Inﬂation Rate is 10% Reduce Money Growth Rate to 3% Graph the Process

242. Graphing Quiz Total Spending Growth Rate is 20% Inﬂation Rate is 10% Reduce Money Growth Rate to 3% Graph the Process Explain

243. Total Spending Rate = Inﬂation Rate + Real GDP Growth Rate

244. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Total Spending Rate = Inﬂation Rate + Real GDP Growth Rate

245. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Inﬂation Rate Total Spending Rate = Inﬂation Rate + Real GDP Growth Rate

246. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Real GDP Growth Rate Inﬂation Rate Total Spending Rate = Inﬂation Rate + Real GDP Growth Rate

248. Remember

249. Remember

250. Remember Mv = PY

251. Remember Mv = PY M = Money Supply

252. Remember Mv = PY M = Money Supply v =Velocity or Spending Rate

253. Remember Mv = PY M = Money Supply v =Velocity or Spending Rate (C + I + G + NX)

254. Remember Mv = PY M = Money Supply v =Velocity or Spending Rate (C + I + G + NX)

255. Remember Mv = PY M = Money Supply v =Velocity or Spending Rate (C + I + G + NX) If v andY are constant

256. Remember Mv = PY M = Money Supply v =Velocity or Spending Rate (C + I + G + NX) If v andY are constant then M = P

258. Great Depression 1929-1940

259. Great Depression 1929-1940

260. Great Depression 1929-1940 MV = PY

261. Great Depression 1929-1940 MV = PY M = Reduced

262. Great Depression 1929-1940 MV = PY M = Reduced V = Reduced

263. Great Depression 1929-1940 MV = PY M = Reduced V = Reduced P = Stuck

264. Great Depression 1929-1940 MV = PY M = Reduced V = Reduced P = Stuck Y = Reduced

265. Great Depression 1929-1940 MV = PY M = Reduced V = Reduced P = Stuck Y = Reduced

266. Aggregate Supply Curve

267. Aggregate Demand Curve

268. If workers see smaller numbers on their paycheck, their morale declines and they often take their anger out on their employers. In contrast, layoffs get the misery out the door.

269. Sticky Wages If workers see smaller numbers on their paycheck, their morale declines and they often take their anger out on their employers. In contrast, layoffs get the misery out the door.

270. Sticky Wages Better to cut wages or layoff? If workers see smaller numbers on their paycheck, their morale declines and they often take their anger out on their employers. In contrast, layoffs get the misery out the door.

Macro 12

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Macro 12