1. Change in Quantity demanded –Movement along the curve –Result of a change in the price –Other factors remain constant Change in Demand –A shift in the curve –Price remains constant –One of the underlying factors change $7 $5 A B 1015 D1D1 D2D2 1018

2. Changes in Equilibrium Equilibrium Price - Equilibrium Quantity - D D S S ? P P ? DD S S

3. Q d1 = 10 – 50Pc +.3(100)+1.5(10)+.05(10) Eq. 2-3 Qs1= -86+90Pc -1.5 (10)+.05(30)+.4(50) Eq. 2-6

4. Qd2= 10 – 50Pc +.3(80)+1.5(28)+.05(8) Eq. 2-8 Qs2= -86+90Pc -1.5 (10)+.05(102)+.4(80) Eq. 2-9 Find EQ P and EQ. Draw Graphs

5. Chapter 11 Measuring Economic Activity Business Cycle Alternating periods of economic expansion and contraction Inflation Peak Recession RecoveryDepression

6. GDP measures the market value of final goods and services produced within a country’s border during a given time period GDP

7. Three approaches to measurement 1.Value added 2.Expenditure method 3.Income method

8. Expenditure Method GDP = C + I + G + (x - m) C =Personal consumption expenditure I =Gross private domestic investment G =Government consumption expenditures and investment (x-m)= net exports