1. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. Chapter 7 Aggregate Demand, Aggregate Supply, and the Self-Correcting Economy

2. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 7-2 Figure 7-1 Effect on Real Income of Different Values of the Price Level

3. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 7-3 Figure 7-2 The Effect on the AD Curve of a Doubling of the Nominal Money Supply

4. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 7-4 Figure 7-3 The Effect on the AD Curve of a Decline in Planned Autonomous Spending

5. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 7-5 Figure 7-4 Effect of a Rightward Shift in the AD Curve with Three Alternative Short-Run Aggregate Supply Curves

6. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 7-6 Figure 7-5 The Labor Demand Curve and the Short-Run Aggregate Supply Curve

7. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 7-7 Figure 7-6 The Short-Run Aggregate Supply Curve for Two Different Values of the Wage Rate, and W 1 W 0

8. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 7-8 Figure 7-7 Determination of the Equilibrium Real Wage Rate

9. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 7-9 Figure 7-8 Effects on the Price Level and Real Income of an Increase in Planned Autonomous Spending from to AD 1 AD 0

10. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 7-10 Figure 7-9 Effect of a Decline in Planned Spending When the Price Level Is Perfectly Flexible

11. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 7-11 Figure 7-10 The Lack of Effect of a Drop in the Price Level When There Is a Failure of Self-Correction

12. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 7-12 Figure 7-11 Effect of a Decline in Planned Spending When the Nominal Rate Is Fixed at W 0

13. Table 7-1 Money, Output, Unemployment, Prices, and Wages in the Great Depression, 1929–41

14. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 7-14 International Perspective Why Was the Great Depression Worse in the United States than in Europe?

15. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 7-15 Figure 7-12 The Price Level (P) and the Ratio of Actual to Natural Real GDP (Y /Y N ) During the Great Depression, 1929–41