ECO 2013 Lecture Notes - Lecture 10: Output Gap, Aggregate Supply, Aggregate Demand
30 Oct 2017
School
Department
Course
Professor
Document Summary
Ii. higher prices, they expect future prices to be lower. If price level increases, aggregate demand shifts up on its line, the line doesn"t move because price level is the y axis. Anything else that increases or shifts up ae would shift ad to the right. Anything else that decreases or shifts down ae would shift ad to the left: long-run equilibrium is when long run aggregate supply and short run aggregate supply and aggregate demand all cross at one point. Taxes reduce ae and move ad to the left. Long run as curve captures potential gdp and usually slowly increases to the right due to increases in worker productivity and new technology etc. If the value of homes increased, household wealth would increase. Review: real gdp, the market value of all final goods and services produced in an economy in a given year, intermediate goods, a good used as a part or in production of another good, ex.
