1. ECONOMICS, 5e Aggregate Demand and Aggregate Supply Roger Arnold
CHAPTER 7
Aggregate Demand and Aggregate Supply

2. Exhibit 1 The Aggregate Demand Curve
Arnold Economics, 5e / Ch. 7 Aggregate Demand and Aggregate Supply
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3. Exhibit 2a Why the Aggregate Demand Curve Is Downward Sloping
Price level falls®purchasing power rises®monetary wealth rises®buy more goods.
Real Balance Effect
Price level rises®purchasing power falls®monetary wealth falls®buy fewer goods.
Arnold Economics, 5e / Ch. 7 Aggregate Demand and Aggregate Supply
©2001 South-Western College Publishing

4. Exhibit 2b Why the Aggregate Demand Curve Is Downward Sloping
Price level falls®purchasing power rises®less money needed to buy fixed bundle of goods®save more®supply of credit rises®interest rate falls®businesses and households borrow more at lower interest rate®buy more goods.
Price level rises®purchasing power falls®borrow money in order to continue to buy fixed bundle of goods®demand for credit rises®interest rate rises®businesses and households borrow less at higher interest rate®buy fewer goods.
Interest Rate Effect
Arnold Economics, 5e / Ch. 7 Aggregate Demand and Aggregate Supply
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5. Exhibit 2c Why the Aggregate Demand Curve Is Downward Sloping
Price level in U.S. falls relative to foreign price levels®U.S. goods relatively less expensive than foreign goods®both American and foreigners buy more U.S. goods.
Price level in U.S. rises relative to foreign price levels®U.S. goods relatively more expensive than foreign goods®both Americans and foreigners buy fewer U.S. goods.
International Trade Effect
Arnold Economics, 5e / Ch. 7 Aggregate Demand and Aggregate Supply
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6. Exhibit 3 A Change in the Quantity Demanded of Real GDP versus a Change in Aggregate Demand
Arnold Economics, 5e / Ch. 7 Aggregate Demand and Aggregate Supply
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7. Exhibit 4 Changes in Aggregate Demand
Arnold Economics, 5e / Ch. 7 Aggregate Demand and Aggregate Supply
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8. Exhibit 5 Factors That Change Aggregate Demand
Arnold Economics, 5e / Ch. 7 Aggregate Demand and Aggregate Supply
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9. Exhibit 6 The Short-Run Aggregate Supply Curve
Arnold Economics, 5e / Ch. 7 Aggregate Demand and Aggregate Supply
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10. Exhibit 7 Wage Rates and a Shift in the Short-Run Aggregate Supply Curve
Arnold Economics, 5e / Ch. 7 Aggregate Demand and Aggregate Supply
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11. Exhibit 8 Changes in Short-Run Aggregate Supply
Arnold Economics, 5e / Ch. 7 Aggregate Demand and Aggregate Supply
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12. Exhibit 9 Short-Run Equilibrium
Arnold Economics, 5e / Ch. 7 Aggregate Demand and Aggregate Supply
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13. Exhibit 10 Changes in Short-Run Equilibrium in the Economy
Arnold Economics, 5e / Ch. 7 Aggregate Demand and Aggregate Supply
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14. Exhibit 11 How a Factor Affects the Price Level, Real GDP, and the Unemployment Rate in the Short-Run
Arnold Economics, 5e / Ch. 7 Aggregate Demand and Aggregate Supply
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15. Exhibit 12 A Summary Exhibit of AD and SRAS
Arnold Economics, 5e / Ch. 7 Aggregate Demand and Aggregate Supply
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16. Exhibit 13 Long-Run Aggregate Supply (LRAS) Curve
Arnold Economics, 5e / Ch. 7 Aggregate Demand and Aggregate Supply
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17. Exhibit 14 Equilibrium States of the Economy
Arnold Economics, 5e / Ch. 7 Aggregate Demand and Aggregate Supply
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18. Exhibit 15 Different States of the Economy
Arnold Economics, 5e / Ch. 7 Aggregate Demand and Aggregate Supply
©2001 South-Western College Publishing