Aggregate Demand- Aggregate Supply. MM MdMd M r AE Y Y P MsMs Y=AE AD AS P* Y* r* Y r P r* M** Y Y Overall: Increase M S from M* to M** Decrease.

Slides:

Advertisements

Similar presentations

Aggregate demand and Aggregate Supply (AD and AS)

Advertisements

Ireland U.S August 2011 Percent job losses in recessions

Macroeconomics unit What you should know by now. You should be able to : Define the following: Gross Domestic Product (GDP) & the 4 components Unemployment.

Aggregate Demand and Supply, cont. On a graph, price level (just like price) is on the vertical axis, while real GDP (just like quantity is on the horizontal.

Understand the role of business in the global economy. 1.

The Stock Market Crashes Video Recap &feature=related.

Aggregate Demand and Aggregate Supply

Classical vs. Keynesian Economists Which model best describes our economy?

GRAPHING FISCAL POLICY. Warm Up:  What is causing the nation to be in a recession?  What could cause the nation to experience a period of inflation.

Business Cycle.

Matching History and Theory Keynesian Stimulus 1) Keynesian Stimulus – 1930’s 1)Fine tuning in the 1960’s.

Unit 3-3: Aggregate Demand and Supply and Fiscal Policy

Towards the Great Depression. Name several financial crises in European History.

Aggregate Demand and Aggregate Supply

CONTEMPORARY ECONOMICS© Thomson South-Western 13.3Economic Instability  Use aggregate demand and aggregate supply to analyze the Great Depression.  Use.

Business Cycles. Fluctuations in Real GDP are referred to as Business Cycles. The duration and intensity of each phase of the Business Cycle are not always.

The Aggregate Expenditures Model 11 McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Economics: Chapter 13 Measuring the Economy’s Performance.

Figure 12.1 The Fed Reaction Rule. Figure 12.2 Changing AD Equilibrium due to the Fed Reaction.

Aggregate Supply/ Aggregate Demand- Application Kaplan University.

Chapter 25 Aggregate Demand and Aggregate Supply.

2-1Measuring Economic Activity 2-2Economic Conditions Change 2-3Other Measure of Business Activity.

How does nominal GDP differ from real GDP?. Nominal = measures current prices Real = measured in constant/unchanging prices.

 Circular Flow – economic model showing income and product movements  Product markets  Goods and services  Total value of output  Factor (input or.

Economic Instability Macroeconomics Principles. Business Cycles Cycle: Systematic ups and downs of GDP Natural Inevitable Necessary? Phases –Recession:

Today’s Schedule – 10/28 Business Cycle PPT Business Cycle Diagrams Homework – Read Ch. 12, Section 2.

The Aggregate Expenditures Model Chapter 28 McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

Chapter 13: Aggregate Demand and Aggregate Supply Model.

Gross Domestic Product (GDP) and Growth Chapter 12.

Aggregate Expenditures: The Multiplier, Net Exports, and Government CHAPTER TEN.

Aggregate Demand Aggregate demand is the total demand in an economy for all the goods and services produced. The aggregate demand schedule is a schedule.

Business Cycle Is the economy getting better or worse?

14-1 The Nation’s Sick Economy. Economic Troubles on the Horizon How did diminished demand affect farmers and businesses in the 1920s? How did falling.

Economics The Business Cycle Unit 3, Lesson 2. What is the Business Cycle? The business cycle is a period of economic expansion followed by a period of.

1 Figure 1a: Potential and Actual Real GDP, Actual and Potential Real GDP (Billions of 1996 Dollars) 2,000 3,000 4,000 5,000 6,000 7,000 8,000.

Practice Question #1 full employment government spending (G) increases Assume the economy is in equilibrium at full employment. If government spending.

ChapterGross Domestic Product and Growth 16 Introduction  What does the Gross Domestic Product (GDP) show about the nation’s economy?  GDP measures the.

Aggregate Expenditures Model Practice Remember: Economic growth (recession) is a result of; 1.Increases (decreases) in Consumption Spending. 2.Increases.

Topic 9 Aggregate Demand and Aggregate Supply 1. 2 The Aggregate Demand Curve When price level rises, money demand curve shifts rightward Consequently,

The Story of Two Recessions The recession of – a supply-shock recession – caused by a reduction in oil supply Price of oil doubled The recession.

Essential Standard 1.00 Understand the role of business in the global economy. 1.

Objective 1.02 Understand economic conditions 1 Understand the role of business in the global economy.

What is a Recession?. In economics, a recession is a general slowdown in economic activity over a sustained period of time, or a business cycle contraction.

12c – The AD /AS Model: Stabilization Policies

Shifters of Aggregate Demand Shifters of Aggregate Supply

Understand the role of business in the global economy

Unit 3: Aggregate Demand and Supply and Fiscal Policy

Aggregate Demand and Aggregate Supply

11 C H A P T E R Aggregate Demand and Aggregate Supply.

Chapter 10 Aggregate Demand and Aggregate Supply McGraw-Hill/Irwin

Chapter 12 Aggregate Demand and Aggregate Supply McGraw-Hill/Irwin

Figure 9.1 U.S. Real GDP and NBER Recessions

Figure 9.1 U.S. Real GDP and NBER Recessions

12c – The AD /AS Model: Stabilization Policies

Chapter 28 The Aggregate Expenditures Model McGraw-Hill/Irwin

The business cycle In a Market Economy.

11 Aggregate Demand and Aggregate Supply C H A P T E R Click To Go

11 C H A P T E R Aggregate Demand and Aggregate Supply.

Aggregate Demand- Aggregate Supply

11 C H A P T E R Aggregate Demand and Aggregate Supply.

Aggregate Demand and Supply

International Economics How Does the Open Macro-economy Work?

Unit 3: Aggregate Demand and Supply and Fiscal Policy

PowerPoint Exhibit Slides to Accompany Principles of Economics

Contemporary Economics: An Applications Approach By Robert J

Macroeconomic Theories

Aggregate Equilibrium

Aggregate demand and aggregate supply

11 Aggregate Demand and Aggregate Supply C H A P T E R Click To Go

11 Aggregate Demand and Aggregate Supply C H A P T E R Click To Go

Presentation transcript:

Aggregate Demand- Aggregate Supply

M*M* MdMd M r AE Y Y P MsMs Y=AE AD AS P* Y* r* Y** r** P** r*** M** Y Y Overall: Increase M S from M* to M** Decrease r* to r*** Increase Y* to full employment Y Increase Prices from P* to P**

Historical Recessions 1973 Oil Embargo – Quadrupling of oil prices (Negative Supply Shock) Spending on War – Positive Demand Shock Stock market crash – Negative Demand Shock Which shock drove the recession?

Historical Recessions Recession – Small recession in 1979 due to energy crisis – Iran limited oil exports, increasing price – Negative Supply Shock Savings and Loan Crisis – Problems in the mortgage market – Negative Demand Shock What was the overall outcome?

Historical Recessions Recession – 1990 Oil Price Increase (Negative Supply Shock)

Historical Recessions 2001 Recession – Dot-Com Bubble – 9/11 Attacks – Both (Negative Demand Shocks) – Expectation?

Great Recession Housing Market Crash

Great Depression