PPT-Aggregate Supply & Demand

Introduction amp Determinants Aggregate Demand Curve Inverse Relationship between price level amp quantity of aggregate output demanded for the economy as a whole Aggregate Price Level measured with GDP deflator. 29. McGraw-Hill/Irwin. Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.. Aggregate Demand. Real GDP desired at each price level. Inverse relationship. Real balances effect. 12. McGraw-Hill/Irwin. Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.. Aggregate Demand. Real GDP desired at each price level. Inverse relationship. Real balances effect. Chapter . 15 . of . Macroeconomics. , . 8. th. . edition, by N. Gregory . Mankiw. ECO62. . Udayan. . Roy. PART V Topics in Macroeconomic Theory. Inflation and dynamics in the short run. So far, to analyze the short run we have used. Chapter . 15 . of . Macroeconomics. , . 8. th. . edition, by N. Gregory . Mankiw. ECO62. . Udayan. . Roy. PART V Topics in Macroeconomic Theory. Inflation and dynamics in the short run. So far, to analyze the short run we have used. Today:. Aggregate demand. Why is it downward sloping?. Factors that affect the aggregate demand. Aggregate supply. Long-run aggregate supply. Short-run aggregate supply. Why is it upward sloping?. Factors that affect the short-run aggregate supply. Derive AS/AD model . Understand cause & consequences of change in AS/AD. Short run vs Long run. Effects on economic growth, prices, unemployment.. Different schools of thought in macroeconomics. Macroeconomic Long Run and Short Run. Derive AS/AD model . Understand cause & consequences of change in AS/AD. Short run vs Long run. Effects on economic growth, prices, unemployment.. Different schools of thought in macroeconomics. Macroeconomic Long Run and Short Run. Day 1. Q1: During the Great Depression we saw a rise in unemployment and deflation. In the recession of 1979-1982 a rise in unemployment but inflation. Why?. Q2: What is stagflation?. Aggregate Supply and Aggregate Demand. Chapter 13. © Dünhaupt, Dullien, Goodwin, Harris, Nelson, Roach, . Torras. Learning goals. After . today‘s. . lecture. , . you. . will . be. . able. . to. :. Explain . the derivation of the Aggregate Demand curve relating inflation and output levels, and how it shifts.. . Adam . smith, credited by many as the founder of classical economics believed the government should intervene in economic affairs as little as possible. John Maynard Keynes asked, “If supply creates its own demand, why are we having a worldwide depression?”. Principle of Effective Demand is the pillar of Keynesian Theory of Employment. Dillard considers the principle of effective demand to be the logical starting point of Keynesian Theory of Employment.. The Influence of Monetary and Fiscal Policy on Aggregate Demand. Monetary policy refers to the control of a country’s quantity of money by its central bank. We saw the . long-run effects. of monetary policy in Chapter 12 (Money Growth and Inflation). AD - The Model. PL. RGDP. AD. PL = Price Level. ALL prices in the economy. Real Gross Domestic Product = Dollar value of ALL domestically produced final goods and services adjusted for inflation. AD = Aggregate demand. The total amount of goods and services people will purchase at ALL price levels. Has the same components as GDP.. Paper: Introductory Macroeconomics. Unit: 4. Prepared by. Anindita. . Chakravarty. There are two main causes of . inflation. . Both . are responsible for a . general rise in prices . in an . economy.