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# Class 06 Aggregate Supply And Demand

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### Class 06 Aggregate Supply And Demand

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