TAILIEUCHUNG - Lecture Principles of economics (Asia Global Edition) - Chapter 24

Chapter 24 - Aggregate demand, aggregate supply, and business cycles. In this chapter you will learn: Define the aggregate demand curve, explain why it slopes downward, and explain why it shifts; define the aggregate supply curve, explain why it slopes upward, and explain why it shifts; show how the aggregate demand and supply curves determine output and the price level in both the short run and the long run;. | Aggregate Demand, Aggregate Supply, and Business Cycles Chapter 24 McGraw-Hill/Irwin Copyright © 2015 by McGraw-Hill Education (Asia). All rights reserved. Learning Objectives Define the aggregate demand curve, explain why it slopes downward, and explain why it shifts Define the aggregate supply curve, explain why it slopes upward, and explain why it shifts Show how the aggregate demand curve and aggregate supply curve determine output and the inflation rate over the business cycle Analyze how the economy adjusts to expansionary and recessionary gaps, and relate this to the concept of a self-correcting economy The Great Recession in . Began December 2007 Most lengthy and severe recession since the great depression Causes: Large housing price bubble burst in July 2006 30% decline in housing prices over next 18 months Financial panic in the fall of 2008 Difficult to borrow Oil price shock Gas hit $4 per gallon in July 2008 Aggregate Demand and Aggregate Supply Analyze fluctuations in both output and the inflation rate Short run and long run analysis Inflation rate and output on the axis AD shows the relationship between planned spending and the inflation rate AS shows how output produced by firms depends on the inflation rate Potential output is shown to measure output gaps Inflation Rate Output Y Aggregate Demand (AD) Aggregate Supply (AS) Y* Long-Run Equilibrium In the long run, Actual output equals potential output Actual inflation rate equals expected price level Long-run equilibrium occurs at the intersection of Aggregate demand Aggregate supply and Potential output Inflation rate Output Y Aggregate Demand (AD) Aggregate Supply (AS) Y* Short-Run Equilibrium Short-run equilibrium occurs when the AD and AS curves intersect at a level of output different from Y* Point A in the graph Short-run equilibrium is temporary Caused by a shift in either AD or AS Inflation rate Output Y AD AS Y* Y1 P1 A The Aggregate Demand Curve The aggregate demand curve shows the .

• Kinh tế học
• Principles of economics
• Lecture Principles of economics
• Market imperfections
• The international economy
• Aggregate demand
• Aggregate supply
• Ten principles of economics
• People face tradeoffs
• Opportunity cost
• Marginal changes
• Economics of information
• Consumer choice
• Free rider problem
• Market transactions
• Welfare Economics
• Consumer surplus
• Demand curve
• Efficiency of markets
• Nature of an externality
• Market inefficiency
• Negative externalities
• Principles of microeconomics
• Lecture Principles of microeconomics
• Scarce resources
• Scarcity implies choice
• Choice implies cost
• Principles of agricultural economics
• Agricultural economics
• Economics of agricultural production
• Theory of consumer behaviour
• Economics of market demand
• Dynamics in demand analysis
• Analysis of agricultural markets
• Agricultural markets
• Economics of trade
• Costs of taxation
• Deadweight loss
• Laffer curve
• Supply side economics
• Market forces
• Supply and demand
• Market economies
• Competitive Markets
• Thinking like an economist
• Economic models
• Circular flow diagram
• Production possibilities frontier
• The gains from trade
• Production possibilities
• Comparative advantage
• Absolute advantage
• Costs of production
• Total revenue
• Total cost
• Opportunity costs
• Price elasticity of demand
• Price elasticity
• Midpoint method
• Demand curves
• Factors of production
• Demand for labor
• Production function
• Marginal product of labor
• Controls on prices
• Price ceiling
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• Market outcomes
• Theory of consumer choice
• Budget constraint
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• Production and growth
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• Public goods
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• Short run economic fluctuations
• Economic fluctuations
• Tax system
• Federal Government
• Marginal tax rate
• Budget surplus
• Macroeconomic policy
• Debate over macroeconomic policy
• Stabilize the economy
• Monetary policy