tailieunhanh - Lecture Economics (18th edition): Chapter 29 - McConnell, Brue, Flynn's

Chapter 29 - Aggregate demand and aggregate supply. This chapter define aggregate demand (AD) and explain the factors that cause it to change; define aggregate supply (AS) and explain the factors that cause it to change; discuss how AD and AS determine an economy's equilibrium price level and level of real GDP; describe how the AD-AS model explains periods of demand-pull inflation, cost-push inflation, and recession; identify how the aggregate demand curve relates to the aggregate expenditures model. | Aggregate Demand and Aggregate Supply Chapter 29 McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter Objectives Aggregate demand (AD) Aggregate supply (AS) How AD and AS determine equilibrium price and real GDP The AD-AS model 29- Aggregate Demand Amount of real GDP purchased at each price level Why the downward slope? Real-balances effect Interest-rate effect Foreign purchases effect Consumption, investment, and net exports 29- Aggregate Demand Curve Real Domestic Output, GDP Price Level AD Aggregate Demand 29- Aggregate Demand Determinants of aggregate demand Fixed variables along the demand curve Change in fixed variable Multiplier effect Consumer spending variables: Consumer wealth Consumer expectations Household borrowing Personal taxes 29- Aggregate Demand Investment spending variables Real interest rates Expected returns Future business conditions Technology Degree of excess capacity Business taxes 29- Aggregate Demand Government spending Net export spending variables National income abroad Exchange rates 29- Changes in Aggregate Demand Real Domestic Output, GDP Price Level AD1 Increase in Aggregate Demand AD3 AD2 Decrease in Aggregate Demand 29- Amount real GDP produced at each price level Three time horizons Immediate short run Few days to a few months All prices fixed Implicit price agreements Contractual agreements Aggregate Supply 29- Aggregate Supply Real Domestic Output, GDP Price Level ASISR Immediate-short-run Aggregate Supply Qf 29- Short run Input prices fixed Output prices variable Real profit changes Long run All prices variable Full employment GDP All prices adjust Aggregate Supply 29- Real Domestic Output, GDP Price Level 0 Qf Aggregate Supply (Short Run) Slope not constant: per unit production cost and firm capacity Aggregate Supply 29- Aggregate Supply Real Domestic Output, GDP Price Level ASLR Long-run Aggregate Supply Qf 29- Determinants of . | Aggregate Demand and Aggregate Supply Chapter 29 McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter Objectives Aggregate demand (AD) Aggregate supply (AS) How AD and AS determine equilibrium price and real GDP The AD-AS model 29- Aggregate Demand Amount of real GDP purchased at each price level Why the downward slope? Real-balances effect Interest-rate effect Foreign purchases effect Consumption, investment, and net exports 29- Aggregate Demand Curve Real Domestic Output, GDP Price Level AD Aggregate Demand 29- Aggregate Demand Determinants of aggregate demand Fixed variables along the demand curve Change in fixed variable Multiplier effect Consumer spending variables: Consumer wealth Consumer expectations Household borrowing Personal taxes 29- Aggregate Demand Investment spending variables Real interest rates Expected returns Future business conditions Technology Degree of excess capacity Business taxes 29- Aggregate