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Creating PowerPoint Lectures w/ Animation
presented by Eric Chiang By Educators. For Students.
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Benefits of Animation:
1) Allows one to break down explanations, graphs, and models into steps 2) Replicates the viewing of the chalkboard in class 3) Allows students to review challenging concepts at home 4) Each slide serves as a template for the next
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Aggregate Demand and Supply /
CoreMacro Chapters 9 – 10 Aggregate Demand and Supply / Fiscal Policy
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1. Promote Economic Growth
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2. Maintain Full Employment
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3. Achieve Price Stability
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Three Well Functioning Markets
Capital Market (interest rates) Product Market (prices) Labor Market (wages)
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Economy stays on the long-run trend in the Classical Growth Model
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Economy experiences business cycles in modern macro models
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is affected by the price level
AD/AS model shows how aggregate output is affected by the price level
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AD/AS Model: Macro Equilibrium
LRAS Price Level (P) SRAS Short-run macro equilibrium Long-run macro equilibrium AD Output
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How does the AD/AS model
explain the business cycle?
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Negative Demand Shock LRAS Price Level (P) SRAS
Long-run macro equilibrium Short-run Eq. AD AD2 Output Output Gap
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Option 1: Letting the Market Correct Itself over Time
LRAS Price Level (P) SRAS SRAS2 Short-run Eq. Long-run Eq. AD AD2 Output Output Gap
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Option 2: Using Expansionary Fiscal Policy to Shift AD
LRAS Price Level (P) SRAS Long-run macro equilibrium Short-run Eq. AD AD2 Output Output Gap
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Positive Demand Shock: Leads to Demand-Pull Inflation
LRAS Price Level (P) SRAS Short-run equilibrium Long-run macro equilibrium AD2 AD Output Output Gap
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Option 1: Letting the Market Correct Itself over Time
SRAS2 LRAS Price Level (P) SRAS Short-run equilibrium AD2 AD Output
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Option 2: Using Contractionary Fiscal Policy to Reduce Inflation
LRAS Price Level (P) SRAS Short-run equilibrium Long-run macro equilibrium AD2 AD Output Output Gap
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Negative Supply Shock: Leads to Cost-Push Inflation
SRAS2 LRAS Price Level (P) SRAS Short-run equilibrium Long-run macro equilibrium AD Output Output Gap
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Maximizing Profit in Competition
CoreMicro Chapters 8 – 9 Maximizing Profit in Competition and Monopoly: The 5 Step Approach
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In a perfectly competitive market…
MC Find MR = MC Find optimal Q Find optimal P Find ATC Find Profit ATC $10 P = MR Profit $7 20 Q
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In a monopoly or monopolistically competitive market…
MC Find MR = MC Find optimal Q Find optimal P Find ATC Find Profit ATC $13 Profit $6 D MR 15 Q
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i>clicker Enhance your grade with active participation
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a b c d Macro Word of the Day “Multiplier Effect”
When word-of-mouth causes products to become popular b When a dollar spent generates many more dollars of spending c When you earn interest on past interest earnings d When you pay more in finance charges than you borrowed
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a b c d Macro Word of the Day “Multiplier Effect”
When word-of-mouth causes products to become popular b When a dollar spent generates many more dollars of spending QUESTION 1 c When you earn interest on past interest earnings Loading Results… d When you pay more in finance charges than you borrowed
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a b c d Famous Economist Ben Bernanke Timothy Geithner Austan Goolsbee
Alan Greenspan
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Famous Building or Landmark
New York Stock Exchange b Bureau of Labor Statistics c U.S. Treasury d Federal Reserve Bank
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How long did our most recent recession officially last?
12 months b 18 months c 24 months d This is a trick question: the recession hasn’t ended
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Is a person who lost a high paying job and temporarily working at a supermarket unemployed?
Yes, s/he is unemployed b No, s/he is employed
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willing to pay for one slice
How much are you willing to pay for one slice of pizza right now? a $5.00 b $3.50 c $2.00 d $1.00 e $0.00
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willing to pay for one slice
How much are you willing to pay for one slice of pizza right now? a $5.00 b $3.50 QUESTION 5 c $2.00 Loading Results… d $1.00 e $0.00 4% % % % %
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Suppose you do not work and have no income
Suppose you do not work and have no income. Besides basic necessities, how much do you need per month to get by? a Less than $200 b $400 c $600 d $800 e $1,000 or more
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Now suppose your rich aunt gives you $1,000/month to spend
Now suppose your rich aunt gives you $1,000/month to spend. How much of this new money would you spend? a Less than $200 b $400 c $600 d $800 e $1,000 (all of it)
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Aggregate Expenditures Model
(AE) 45º line: Y = AE C DEBT SAVINGS Income (Y)
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i>clicker Enhance your grade with active participation
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a b Homer is fired from the power
plant and goes back to school to earn a college degree. Homer is: a still part of the labor force b not part of the labor force Loading Results…
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A business cycle recovery that doesn’t reach its long-term
trend can lead to: a hyperinflation b lower cyclical unemployment c its natural unemployment rate d a double dip recession
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If the price index is 200, how much did a $4 Big Mac (today)
cost in the base year? a $0.40 b $1.00 c $2.00 d $8.00
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By Educators. For Students.
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By Educators. For Students.
My Contact Information: Phone: Web: ProfessorChiang.com Twitter: @ProfessorChiang Facebook.com/CoreEconomics By Educators. For Students.
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