Macroeconomics: Study Guide Tom Porter, 2014. Supply and Demand Start with supply and demand –For macroeconomics the starting point is aggregate supply.

Slides:



Advertisements
Similar presentations
Slide 1 Diploma Macro Paper 2 Monetary Macroeconomics Lecture 3 Aggregate demand: Investment and the IS-LM model Mark Hayes.
Advertisements

A Macroeconomic Theory of the Open-Economy. Outline:  Develop a model to study forces that determine the open economy variables (NX, NFI, RER)  How.
Chapter 23 Monetary Policy
AP Macroeconomics Macroeconomic Relationships a cheat sheet (Note:.: = therefore)
Aggregate Demand and Supply
ECO 102 Macroeconomics Chapter 3 Aggregate Demand and Aggregate Supply
Nominal and Real Interest Rates Interest can be thought of as “rent on money“ Interest can be thought of as “rent on money“ The fee (interest) is compensation.
Putting it all together…
An Introduction to Basic Macroeconomic Markets
Unit 4: Money and Monetary Policy 1. THE FED Monetary Policy 2.
Monetary and Fiscal Policies
Copyright © 2002 Pearson Education, Inc. Aggregate Demand Aggregate demand for current output, Y d, is: Y d = C + I + G + NX. The AD curve slopes downward.
An Introduction to Basic Macroeconomic Markets
C h a p t e r twenty-four © 2006 Prentice Hall Business Publishing Economics R. Glenn Hubbard, Anthony Patrick O’Brien—1 st ed. Prepared by: Fernando &
Chapter 8 Slide 1 Figure 8-1 page 194 Imports and Exports as a Percentage of Output: 1997 Slide 2 Figure 8-2 page 200 Savings and Investment in a Small.
Monetary Transmission Mechanism Chapter 23. Two Types of Economic Models 1. Reduced Form 2. Structural.
Chapter 9: Introduction to Economic Fluctuations.
Ch. 7: Aggregate Demand and Supply
Copyright©2004 South-Western 32 A Macroeconomic Theory of the Open Economy.
Chapter 22 Aggregate Demand and Supply Analysis. Copyright © 2007 Pearson Addison-Wesley. All rights reserved Aggregate Demand The relationship.
An Introduction to Basic Macroeconomic Models
11 THE MACROECONOMICS OF OPEN ECONOMIES. Copyright©2004 South-Western 31 Open-Economy Macroeconomics: Basic Concepts Open-Economy Macroeconomics: Basic.
Copyright © 2010 Pearson Education. All rights reserved. Chapter 22 Aggregate Demand and Supply Analysis.
Section 4 Activity – AD, SRAS, LRAS
Mr. Sloan Riverside Brookfield High school.  2 Hours and 10 Minutes Long  Section 1-Multiple Choice ◦ 70 Minutes Long ◦ Worth 2/3 of the Score  Section.
© 2008 Nelson Education Ltd. N. G R E G O R Y M A N K I W R O N A L D D. K N E E B O N E K E N N E T H J. M c K ENZIE NICHOLAS ROWE PowerPoint ® Slides.
Copyright © 2006 Thomson Learning 32 A Macroeconomic Theory of the Open Economy.
AP Macroeconomics. 1. Review process/hints for writing the Economics FRQ 2. Work through a sample long FRQ.
AP Economics Mr. Bernstein Macro Graphs Review May 2014.
Macro Chapter 14 Modern Macroeconomics and Monetary Policy.
Chapter 14.  Discuss Milton Friedman’s contribution to modern economic thought.  Evaluate appropriately timed monetary policy and its impacts on interest.
BASIC MACROECONOMICS IMBA Managerial Economics Lecturer: Jack Wu.
CHAPTER 27 Aggregate Supply and Aggregate Demand PowerPoint® Slides by Can Erbil © 2005 Worth Publishers, all rights reserved.
Chapter 22 Aggregate Demand and Aggregate Supply ©2000 South-Western College Publishing.
© 2008 Pearson Education Canada24.1 Chapter 24 Aggregate Demand and Supply Analysis.
Module Equilibrium in the Aggregate Demand- Aggregate Supply Model KRUGMAN'S MACROECONOMICS for AP* 19 Margaret Ray and David Anderson.
Copyright © 2010 Cengage Learning 32 A Macroeconomic Theory of the Open Economy.
Monetary Policy and Interest Rates. Expansionary Policy The Federal Reserve tries to reduce unemployment by: – Buying bonds (open market transactions)
Price and Output and Macroeconomic Policies in an Open Economy.
Mr. Bernstein Macro Graphs Review April 2015
Copyright © 2010 Pearson Addison-Wesley. All rights reserved. Chapter 23 Aggregate Demand and Supply Analysis.
Module 32 Money Output & Prices in the Long Run. 1. What are the effects of an inappropriate monetary policy? 2. What is the concept of monetary neutrality?
SHORT-RUN/LONG-RUN GRAPHING Summary. Why Aggregate Demand Slopes downward?  Think about AD from the perspective of the people buying  price level =
C h a p t e r twenty-four © 2006 Prentice Hall Business Publishing Economics R. Glenn Hubbard, Anthony Patrick O’Brien—1 st ed. Prepared by: Fernando &
Chapter 13: Aggregate Demand and Aggregate Supply Model.
MACRO FINAL REVIEW. Qty of Cars 2, , ,000 3,000 1,000 Qty of Computers A G All about PPF Curves.
Aggregate Supply and Aggregate
Copyright © 2003 by South-Western/Thomson Learning. All rights reserved. CHAPTER 24 Aggregate Demand and Aggregate Supply.
Macroeconomics: Basic Model Tom Porter, The Production Function Wealth ultimately depends on society’s ability to produce goods and services.
Money, Output, and Prices in the Long Run. Short-Run and Long-Run Effects of an Increase in the Money Supply Short-Run and Long-Run Effects of an Increase.
11 THE MACROECONOMICS OF OPEN ECONOMIES. Copyright © 2006 Thomson Learning 31 Open-Economy Macroeconomics: Basic Concepts.
Review of the previous lecture Exchange rates nominal: the price of a country’s currency in terms of another country’s currency real: the price of a country’s.
Module Money, Output, and Prices in the Long Run
Macro Chapter 9 An Introduction to Basic Macroeconomic Markets.
Module Money, Output, and Prices in the Long Run KRUGMAN'S MACROECONOMICS for AP* 32 Margaret Ray and David Anderson.
Relationship between GDP and Unemployment… Now lets add PL changes… This is the Aggregate Model.
1. The Starting Point Assume the U.S. economy is operating at a level above potential output. Draw a correctly labeled graph...
1 of 48 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall · Macroeconomics · R. Glenn Hubbard, Anthony Patrick O’Brien, 3e. Chapter.
Unit 4: Money and Monetary Policy 1. THE FED Monetary Policy 2.
Module The Foreign Exchange Market KRUGMAN'S MACROECONOMICS for AP* 42 Margaret Ray and David Anderson.
Chapter 32 Open Economies An open economy is one that interacts _________ with other economies around the world.
Types of Inflation, Disinflation, and Deflation Is Inflation Always a Bad Thing?
Macroeconomics Graphs AP Economics Mr. Bordelon. Simple Circular Flow Diagram.
Money Tom Porter, Money There are two dimensions to money and two markets used to understand money. 1.Loanable Funds Markets – Savings and investment.
Chapter 8 Slide 1 Figure 8-1 page 194
Macroeconomics Lecture 12 Revision.
A Macroeconomic Theory of the Open Economy
A Macroeconomic Theory of the Open Economy
A Macroeconomic Theory of the Open Economy
Macroeconomic Theory of Open Economy
Presentation transcript:

Macroeconomics: Study Guide Tom Porter, 2014

Supply and Demand Start with supply and demand –For macroeconomics the starting point is aggregate supply and aggregate demand –Know the 3 equations for this graph: AD = C + I + G + NX LRAS = the production function, Y N = A F(L,K,H,N) SRAS = Y N + a (P – P e ) –One or another of these lines will change given a shock (or other change) to one of the variables in these equations. Copyright © 2014 Dr. Tom Porter 2

FIGURE 14.8: The Long-Run Equilibrium Copyright © 2014 by Nelson Education Limited

Interest Rates Interest Rates are determined by supply and demand There are 2 interest rates: 1.Real interest rates are determined by the supply and demand for loanable funds Supply for loanable funds are from Savings Demand for loanable funds are from Investment The difference between this rate and the world real interest rate determines Net Capital Outflow. The Real Exchange Rate, then adjusts to balance Net Capital Outflow with Net Exports. See Following Slide 2.Nominal interest rates – to be continued after next slide. Copyright © 2014 Dr. Tom Porter 4

FIGURE 13.3: The Real Equilibrium in a Small Open Economy Copyright © 2014 by Nelson Education Ltd.13-5

Interest Rates (continued) Interest Rates are determined by supply and demand There are 2 interest rates: 1.Real interest rates – see previous slides 2.Nominal interest rates are determined by the supply and demand for money. The price level also adjusts based on the supply and demand for money. See the next two slides. –Nominal interest rates are tied to changes in the price level. Percentage changes in the price level is inflation, so the relationship between interest rates and prices is: R = π + r Copyright © 2014 Dr. Tom Porter 6

FIGURE 11.1: How the Supply and Demand for Money Determine the Equilibrium Price Level Copyright © 2014 by Nelson Education Ltd.11-7

FIGURE 15.4: Equilibrium in the Money Market Copyright © 2014 by Nelson Education Ltd. 15-8

Two money equations represent long-run and short-run dynamics. 1. Long-run forces adjust so that: M x V = P x Y 2. Investment decisions are determined by: R = π + r where inflation, π, is expected inflation. Copyright © 2014 Dr. Tom Porter 9 Monetary Policy and Markets

Feedback: Privacy Policy Feedback
Do Not Sell My Personal Information
About project: SlidePlayer Terms of Service

© 2024 SlidePlayer.com. Inc. All rights reserved.