ECON 2010 Chapter : Chapter 13 Book Notes

5 views7 pages
15 Mar 2019
School
Department
Course
Professor

Document Summary

The aggregate demand-aggregate supply model: a brief overview: ad-as has 2 advantages over keynesian model: factors constant] inflation rate [other factors constant] potential output y* level of gdp that is above or below potential. The aggregate demand curve: graph, current level of output [y] = horizontal axis, ad-as is short and long run, key. Why does the ad curve slope downward? decrease in short run equilibrium output. Inflation rate and planned spending connected through monetary policy rule: inflation raises, fed reserve increase real interest rate. Demand shocks: changes in output & inflation rate, planned spending affected by, output gap starts to close as actual output y falls relative to potential, recessionary gap opens, inflation falls. Rise: changes in willingness of foreigners to purchase domestic goods or domestic residents to purch. foreign good affect planned level of nx, decreased business confidence or new tech opp.

Get access

Grade+20% off
$8 USD/m$10 USD/m
Billed $96 USD annually
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
40 Verified Answers
Class+
$8 USD/m
Billed $96 USD annually
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
30 Verified Answers

Related Documents

Related Questions