12 SHORTRUN ECONOMIC FLUCTUATIONS Aggregate Demand Aggregate Supply
- Slides: 14
12 SHORT-RUN ECONOMIC FLUCTUATIONS
Aggregate Demand Aggregate Supply Copyright © 2006 Thomson Learning 33
Figure 1 A Look At Short-Run Economic Fluctuations Copyright © 2004 South-Western
Figure 1 A Look At Short-Run Economic Fluctuations Copyright © 2004 South-Western
Figure 1 A Look At Short-Run Economic Fluctuations Copyright © 2004 South-Western
Figure 2 Aggregate Demand Aggregate Supply. . . Price Level Aggregate supply Equilibrium price level Aggregate demand 0 Equilibrium output Quantity of Output Copyright © 2004 South-Western
Figure 3 The Aggregate Demand Curve. . . Price Level P P 2 1. A decrease in the price level. . . 0 Aggregate demand Y Y 2 Quantity of Output 2. . increases the quantity of goods and services demanded. Copyright © 2004 South-Western
Figure 4 The Long-Run Aggregate Supply Curve Price Level Long-run aggregate supply P P 2 2. . does not affect the quantity of goods and services supplied in the long run. 1. A change in the price level. . . 0 Natural rate of output Quantity of Output Copyright © 2004 South-Western
Figure 5 Long-Run Growth and Inflation 2. . and growth in the money supply shifts aggregate demand. . . Long-run aggregate supply, LRAS 1980 LRAS 1990 LRAS 2000 Price Level 1. In the long run, technological progress shifts long-run aggregate supply. . . P 2000 4. . and ongoing inflation. P 1990 Aggregate Demand, AD 2000 P 1980 AD 1990 AD 1980 0 Y 1980 Y 1990 Quantity of Output 3. . leading to growth in output. . . Y 2000 Copyright © 2004 South-Western
Figure 6 The Short-Run Aggregate Supply Curve Price Level Short-run aggregate supply P P 2 2. . reduces the quantity of goods and services supplied in the short run. 1. A decrease in the price level. . . 0 Y 2 Y Quantity of Output Copyright © 2004 South-Western
Figure 7 The Long-Run Equilibrium Price Level Long-run aggregate supply Short-run aggregate supply A Equilibrium price Aggregate demand 0 Natural rate of output Quantity of Output Copyright © 2004 South-Western
Figure 8 A Contraction in Aggregate Demand 2. . causes output to fall in the short run. . . Price Level Long-run aggregate supply Short-run aggregate supply, AS AS 2 3. . but over time, the short-run aggregate supply curve shifts. . . A P B P 2 P 3 1. A decrease in aggregate demand. . . C Aggregate demand, AD AD 2 0 Y 2 Y 4. . and output returns to its natural rate. Quantity of Output Copyright © 2004 South-Western
Figure 10 An Adverse Shift in Aggregate Supply 1. An adverse shift in the shortrun aggregate supply curve. . . Price Level Long-run aggregate supply AS 2 Short-run aggregate supply, AS B P 2 A P 3. . and the price level to rise. Aggregate demand 0 Y 2 2. . causes output to fall. . . Y Quantity of Output Copyright © 2004 South-Western
Figure 11 Accommodating an Adverse Shift in Aggregate Supply 1. When short-run aggregate supply falls. . . Price Level Long-run aggregate supply P 3 C P 2 3. . which P causes the price level to rise further. . . 0 A 4. . but keeps output at its natural rate. Natural rate of output Short-run aggregate supply, AS AS 2 2. . policymakers can accommodate the shift by expanding aggregate demand. . . AD 2 Aggregate demand, AD Quantity of Output Copyright © 2004 South-Western
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- Key facts about economic fluctuations
- Aggregate supply and demand graph
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- Aggregate of chapter 6
- Aggregate supply shocks
- Module 5 supply and demand introduction and demand
- Matching supply with demand
- Advantages of non coherent mti radar
- Measuring exposure to exchange rate fluctuations
- Exchange rate fluctuations