TAILIEUCHUNG - Lecture Business economics - Lecture 26: The Influence of Monetary and Fiscal

In this chapter you will learn the theory of liquidity preference as a short-run theory of the interest rate, analyze how monetary policy affects interest rates and aggregate demand, analyze how fiscal policy affects interest rates and aggregate demand, discuss the debate over whether policymakers should try to stabilize the economy. | Review of the previous lecture In the long run, the aggregate supply curve is vertical. The short-run, the aggregate supply curve is upward sloping. The are three theories explaining the upward slope of short-run aggregate supply: the misperceptions theory, the sticky-wage theory, and the sticky-price theory. Bullet three, move the misperceptions theory to the end. Review of the previous lecture Keynes proposed the theory of liquidity preference to explain determinants of the interest rate. According to this theory, the interest rate adjusts to balance the supply and demand for money. An increase in the price level raises money demand and increases the interest rate. A higher interest rate reduces investment and, thereby, the quantity of goods and services demanded. The downward-sloping aggregate-demand curve expresses this negative relationship between the price-level and the quantity demanded. Review of the previous lecture Policymakers can influence aggregate demand with .

• Kinh tế học
• Business economics
• Lecture Business economics
• Business applications of economics
• Open economy
• Competitive markets
• The Influence of Monetary
• Economic Models
• Principles of economics
• Economics of agriculture
• Monopolistic competition
• Macroeconomic policy
• Supply curve
• Elasticity of demand
• Consumer choice
• Competitive firms
• Imperfect competition
• Gross domestic product
• Financial intermediaries
• Productivity growth
• Natural rate of unemployment
• Labor force
• Money supply