ECON100 Lecture Notes - Lecture 16: Fiscal Policy, World Economy, Aggregate Supply

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peachhare525

21 Jun 2016

School

University of Waterloo

Department

Economics

Course

ECON100

Professor

Joseph Dejuan

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Document Summary

Aggregate supply changes if an influence on production plans other than the price level changes. Effect of an increase in potential gdp. When potential gdp increases, both las and saf shift rightward. Curves shift by the same amount only if full employment price level remains constant. Las curve shifts rightward and sas curve shifts along with. Changes in money wage rate (and other factor prices) The effect of a rise in the money wage rate. Short run aggregate supply decreases and sas curve shifts leftward. Drought leads to lower crop yields in manitoba. Opec agrees to increase world oil output, leading to lower oil prices. Potential gdp doesn"t rise because you can only extract more oil. Ie coming closer to potential gdp but not moving it. Canadian households expected greater income in 2016. Will not affect any of the curves (affects only demand) Buying plans depend on many factors and some of the main ones are.

Related Questions

peardonkey125

Determine the effect on either the aggregate demand curve (is it a rightward or a leftward shift?), the aggregate short-term supply curve, and the long-term aggregate supply curve (does the upward sloping portions of the SAS curve shift left or right, or does the vertical portion of the LAS curve shift to the right or the left?). Also determine the effect on the price level, the real output level, and employment/unemployment. Explain and express this graphically using the AS/AD macro model.

The rapid development of internet technologies during the 1990s allowed businesses to produce goods and services cheaper than before and also gave rise to completely new services. We would show this change in the aggregate-demand/aggregate-supply model by moving the aggregate supply curve down (right) with little change in aggregate demand. Improvements in technology increase potential output and reduce costs, moving the short aggregate supply curve down and the long-run aggregate supply curve to the right.

ochreworm549

yellowmule224

ECON100 Lecture Notes - Lecture 16: Fiscal Policy, World Economy, Aggregate Supply

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