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Transcript
Module 19 Equilibrium in the Aggregate DemandAggregate Supply Model KRUGMAN'S MACROECONOMICS for AP* Margaret Ray and David Anderson What you will learn in this Module: • The difference between short-run and long-run macroeconomic equilibrium • The causes and effects of demand shocks and supply shocks • How to determine if an economy is experiencing a recessionary gap or an inflationary gap and how to calculate the size of the output gaps The AD-AS Model • Model used to analyze economic fluctuations Shifts of the Aggregate Demand Curve • ∆C, ∆I, ∆G, ∆X - ∆M •∆Expectations •∆Wealth •∆Existing Stock of Capital •∆Fiscal Policy •∆Monetary Policy Shifts of the Short-Run Aggregate Supply Curve • ∆ Commodity Prices • ∆ Nominal Wages • ∆ Productivity Short-Run Macroeconomic Equilibrium • Short-Run Macroeconomic Equilibrium • Price Level • Aggregate Output • Shortage/Surplus • Relative Declines Shifts of Aggregate Demand: Short-Run Effects • Demand Shock • Negative Demand Shock • Positive Demand Shock Shifts of the SRAS Curve • Supply Shock • Negative Supply Shock • Stagflation • Positive Supply Shock Long-Run Macroeconomic Equilibrium • Long-Run Macroeconomic Equilibrium • Recessionary Gap • Self-Correction • Inflationary Gap • Self-Correction • Output Gap
