PPT-Aggregate Demand & Aggregate Supply Equilibrium

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. 1. 2. What is a Market?. Market. is a mechanism through which buyers and sellers (individuals, firms, agents or dealers) of a good (or service) interact to determine price and quantity of a product. . Introduction to Demand. In the United States, the forces of supply and demand work together to set prices. . Demand. is the desire, willingness, and ability to buy a good or service.. one individual consumer OR. 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. AP Economics. Ms. . LaRosa. What would you be willing to buy?. How many bags of your favorite candy would you be willing to buy at each of the following prices over one-week?. $1. $2.50. $5. What is Demand?. Aggregate Demand. Aggregate Demand slopes downward like other demand curves, but for different reasons.. Aggregate Demand. An increase in the aggregate price level will cause real spending to decrease. This is seen as a movement upward along a given AD curve. 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. THIRD EDITION. ECONOMICS. and. MACROECONOMICS. Paul Krugman | Robin Wells. What a . competitive market . is and how it is described by the . supply and demand model. What the . demand curve . and . supply curve . 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?”. What are they Meder?. The three questions are?. Does the event (headline ) affect Demand, Supply, or Both?. Does the event (headline . ) shift the graph to the right (increase) or Left (decrease)?. What are the new equilibrium price and quantity? (P2 & Q2). demand, supply, equilibrium. PRESENTATION FOR ECONOMICS HONOURS STUDENTS, SEMESTER I. CONCEPTS:. NATURE OF ECONOMICS. Traditional economic theory has developed along two concepts; (1) Normative and (2) Positive. .