TOPICS
Aggregate Supply (AS) and its
Determinants
Macroeconomic Equilibrium
- Changes in AD and what
happens to UE, IN, and EG
- Changes in AS and what happens to UE, IN, and EG
- Changes in both AD and AS and what happens to UE, IN,
and EG
OUTCOMES
Define, draw, and
describe the shape of the immediate short-run, short-run,
and long-run AS curves, and understand the determinants
of the short-run AS curve
[Define, Draw, Describe,
Determinants]
Find an economy's equilibrium
price level and real domestic output using AD/AS
graph
Explain using an AD/AS graph
what happens to RDO, the price level, UE, IN, and EG when
there is a change in AD and/or AS.
Explain the ratchet effect and
demand pull inflation
Explain cost-push inflation and
stagflation
Two (or three) definitions of
economic growth
IN THE NEWS -Use the AS/AD model
to explain what might happen to UE, IN, and EG following
these events in the news:
-
2003: "the recently-signed tax-cut plan, which will
give rebate checks to families with children in late
summer, right in time for back-to-school
spending"
- 2003: "improving
consumer confidence -- critical, since consumer
spending makes up more than two-thirds of the
economy"
- 2003: "The
Commerce Department's report last week of a surprising
August improvement in the international trade balance
"
- 2009: "Personal
spending jumped 1.3% last month, the government
said."
- 2011: "With
energy prices already well on the rise before the
latest crisis hit the Middle East and North Africa, is
the global economy headed for another
tumble?
How can an economy go
beyond the full employment level of output?
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