Money, Output and Prices in the Long Run

Slides:

Advertisements

Similar presentations

ECO Global Macroeconomics TAGGERT J. BROOKS SPRING 2014.

Advertisements

Activity 41 The neutrality of money. Money is neutral In the long run changes in money supply will only change price level and have no change on real.

AP Economics Mr. Bernstein Module 31: Money Policy and the Interest Rate March 3, 2015.

AP Economics Mr. Bernstein Module 37: Long Run Economic Growth March 30, 2015.

AP Economics Mr. Bernstein Module 17: Aggregate Demand: Introduction and Determinants March 10, 2015.

Aggregate Supply: Introduction and Determinants

AP Economics Mr. Bernstein Macro Graphs Review May 2014.

Monetary Policy and the Interest Rate Controlling the Supply of Money.

Aggregate Demand and Aggregate Supply in the Long Run.

AP Economics Mr. Bernstein Module 19: Equilibrium in the Aggregate Demand- Aggregate Supply Model March 12, 2015.

Mr. Bernstein Module 28: The Money Market March 3, 2015

 When real output falls short of its potential level, a recessionary gap is created  To stimulate output and increase employment, the Bank of Canada.

Economic Policy and the Aggregate Demand-Aggregate Supply Model

AGGREGATE SUPPLY (AS) AND THE EQUILIBRIUM PRICE LEVEL The AS curve in short run (SRAS) Shifts of SRAS Equilibrium price level Long run AS Monetary and.

Mr. Bernstein Macro Graphs Review April 2015

Inflation, Unemployment, and Stabilization Policies: Money, Output, and Prices in the Long Run AP Economics Mr. Bordelon.

Module 32 Money Output & Prices in the Long Run. 1. What are the effects of an inappropriate monetary policy? 2. What is the concept of monetary neutrality?

Interest Rates & Monetary Policy Part II AP Macroeconomics.

Money, Output, and Prices in the Long Run. Short-Run and Long-Run Effects of an Increase in the Money Supply Short-Run and Long-Run Effects of an Increase.

AP Economics Mr. Bernstein Module 32: Money, Output and Prices in the Long Run March 16, 2015.

Module Money, Output, and Prices in the Long Run

Module Money, Output, and Prices in the Long Run KRUGMAN'S MACROECONOMICS for AP* 32 Margaret Ray and David Anderson.

AP Economics Mr. Bernstein Module 54: The Production Function November 2015.

Module Aggregate Supply: Introduction and Determinants KRUGMAN'S MACROECONOMICS for AP* 18 Margaret Ray and David Anderson.

Types of Inflation, Disinflation, and Deflation Is Inflation Always a Bad Thing?

Unit #3 Key Graphs AS/AD Model PPF. Practice Free Response Answers.

Krugman/Wells Macroeconomics in Modules and Economics in Modules Third Edition MODULE 28 (64) Aggregate Supply.

INFLATION AND UNEMPLOYMENT IS-LM MODEL RATIONAL EXPECTATIONS - MONETARY POLICY IN THE SHORT-RUN Lecture 8 Monetary policy.

Macroeconomic Relationships a cheat sheet (Note: .: = therefore)

The Influence of Monetary and Fiscal Policy on Aggregate Demand

Economic Growth in Macroeconomic Models

Warm-Up Assume the economy is in long-run equilibrium when the Fed uses expansionary monetary policy: Draw the AD-AS model Show the impact of the policy.

Money Policy and the Interest Rate

Monetary and Fiscal Policy in the ISLM Model

Simple Keynesian Model

Mr. Bernstein Macro Graphs Review May 2017

Money and Banking Lecture 44.

KRUGMAN’S Economics for AP® S E C O N D E D I T I O N.

The Classical Theory of Inflation

Section 4 Module 19.

Aggregate Supply and Aggregate Demand

The Short-Run Trade-Off between Inflation and Unemployment

Module Economic Growth in Macroeconomic Models

SHORT-RUN ECONOMIC FLUCTUATIONS

Aggregate Demand and Aggregate Supply

Module Economic Growth in Macroeconomic Models

Please read the following License Agreement before proceeding.

Equilibrium in the Aggregate Demand- Aggregate Supply Model

Extending the Analysis of Aggregate Supply

Module Economic Growth in Macroeconomic Models

Inflation and Unemployment and the Phillips Curve

Economic Growth in Macroeconomic Models

Reconciling the Models

Module Money, Output, and Prices in the Long Run

Module Money, Output, and Prices in the Long Run

Money, Output, and Prices in the Long Run

Module Economic Growth in Macroeconomic Models

AP ECONOMICS: October 26 Warm-up: Exit Slips 26 and 28 (see class set handouts)—answer the six questions in complete sentences AP Economics Learning.

Money, Output, and Prices in the Long Run

FIGURE 14.1 Change in the Price Level and the Effect on the Money Market

Aggregate Equilibrium

Shifting Aggregate Supply

SHORT-RUN ECONOMIC FLUCTUATIONS

Monetary and Fiscal Policy Effects on the Economy

Chapter 9: Introduction to Economic Fluctuations

AP ECONOMICS: March 26 Warm-up --Interest rates rise from 1% to 4%. How would this impact money demand in terms of transactions demand and asset demand?

QUESTION #1 1b) Both Prices & Wages are sticky in the short run which causes QTY supply to rise as inflation Examples Price Level ↑ => nominal prices.

Module Money, Output, and Prices in the Long Run

Presentation transcript:

Money, Output and Prices in the Long Run AP Economics Mr. Bernstein Module 32: Money, Output and Prices in the Long Run March 2017

AP Economics Mr. Bernstein Money, Output and Prices in the Long Run Objectives - Understand each of the following: The effects of an inappropriate monetary policy The concept of monetary neutrality and its relationship to the long-term economic effects of monetary policy

AP Economics Mr. Bernstein Short-Run and Long-Run Effects of Increase in MS Counter-productive action can destabilize ie Expansionary Policy when at LR equilibrium Shifts AD right Both Y and P rise Eventually wages rise, SRAS shifts left, and in the long run prices rise but Y does not

AP Economics Mr. Bernstein Money Neutrality Changes in Money Supply have no effect on economy MS increase leads to price increase 1-for-1 And nothing changes in real terms…

AP Economics Mr. Bernstein Changes in MS and Interest Rates in the Long Run Increase in MS causes short-term rates to fall Also causes prices to rise …which increases MD (shifts to right)… …and returns interest rate to its original level