ECON 105 Chapter Notes - Chapter 23: Aggregate Supply, Aggregate Demand, European Cooperation In Science And Technology

• School: Simon Fraser University
• Department: Economics
• Course: ECON 105
• Professor: Seong- Jun Choi

Document Summary

Chapter 23: output and prices in the short run. Exogenous changes in the price level: all of economy"s prices. Ae curve (consumption) shifts when there are "s in the pl. Most of the private sector"s wealth remains in assets with a fixed nominal value (ex. Money, gov. or corporate bonds: bond holder lends money to the issuer and receives payment when bond matures, when pl lender is worse off, issuer is better off. Value of money when lent is lower that real value. A rise in the price level lowers the real value of money held by the private sector. A fall in the price level raises the real value of money held by the private sector. Changes in the price level change the wealth of bondholders and bond issuers, but because the changes offset each other, there is no change in aggregate wealth.