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Chapter 26

Economics 1022A/B Chapter Notes - Chapter 26: Real Wages, Aggregate Demand, Aggregate Supply


Department
Economics
Course Code
ECON 1022A/B
Professor
Jeannie Gillmore
Chapter
26

This preview shows pages 1-2. to view the full 7 pages of the document.
     1
Macroeconomics 1022B
Lecture Cycle 7
Chapter 26: Aggregate Supply and Aggregate Demand
Aggregate Supply
 !"
!!#$%
&  "$"
"'(# $)*%+!$)*
  #)*,%
-. !!#$!
.(+!
Aggregate Demand
/!"0)*1+!"(# # 
2' #%
/!+!"2+!" (
2" %/!" (" '3
 2+!"'3%4 
('""%
The labor market can be in 1 of 3 states:
5% 
% #"
6% 7."
-"2+!")*!)*2. "
+!"%-#  2, 
")*, !)*%
10!.+!")* #%
-0!&
2we disnguish between 2 me frames:
5% 8
% 
Long-Run Aggregate Supply
8010!.+!")*
 #.. . #"
%
/!")*"+!)*2+!
" #%
 #2 # 2.
."+#)*
!)*%

Only pages 1-2 are available for preview. Some parts have been intentionally blurred.

     2
 ##!  !)*
" #%
-" 2movement along the
LAS is accompanied by a change in 2 sets of prices:
5% * "(#  #
% * "" " !.
o7  #. 
 2.
 "+#%
. # .
 2 
!)*%
Short-Run Aggregate Supply
010!.+!"
)* #..2 
" 2!)* %
42 # +!
")*% #
.%
9#.2 #. .
"+#% #2
+!")*+!)* #
 8 #%
-4" ##+2+!"
)*  #3 
!)*2# #%
Changes in Aggregate Supply
  # +!")*#
 %
 .,  ! # %
,   *!)* .%
Changes in Potential GDP
9!)* 2 % !)* 
8%
-. #:"" #
 2. .. %
Potenal GDP can increase for any of 3 reasons:
5% 4 ;/!"81*!)* "
"+!" % !#
 , !)*%7 )*, !
!)*2 !)*8%
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