Module Economic Growth in Macroeconomic Models

Slides:

Advertisements

Similar presentations

Macroeconomic Equilibrium

Advertisements

Module Equilibrium in the Aggregate Demand- Aggregate Supply Model

Equilibrium in the AD/AS Model Module 19. Learning Objectives The difference between short-run and long- run macroeconomic equilibrium. The causes and.

April 27, 2015 Begin Unit 5 : Economic Growth and Productivity

Ch. 7: Aggregate Demand and Supply

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

Module Supply and Demand: Changes in Equilibrium

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

Aggregate Supply: Introduction and Determinants

Aggregate Supply Module 18.

Module Equilibrium in the Aggregate Demand- Aggregate Supply Model

Module Equilibrium in the Aggregate Demand- Aggregate Supply Model KRUGMAN'S MACROECONOMICS for AP* 19 Margaret Ray and David Anderson.

 Equilibrium in the Aggregate Demand/Aggregate Supply Model.

Module Economic Growth in Macroeconomic Models KRUGMAN'S MACROECONOMICS for AP* 40 Margaret Ray and David Anderson.

ECO Global Macroeconomics TAGGERT J. BROOKS.

© 2011 Pearson Education Aggregate Supply and Aggregate Demand 13 When you have completed your study of this chapter, you will be able to 1 Define and.

ECO Global Macroeconomics TAGGERT J. BROOKS.

Module Economic Growth in Macroeconomic Models KRUGMAN'S MACROECONOMICS for AP* 40 Margaret Ray and David Anderson.

Lesson 7-2 Aggregate Supply. Aggregate Supply: the Long Run and The Short Run Basic Definitions The short run in macroeconomic analysis is a period in.

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.

1 Sect. 4 - National Income & Price Determination Module 16 - Income & Expenditure What you will learn: The nature of the multiplier The meaning of the.

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

Charis, will you go to prom with me?. Module Aggregate Demand: Introduction and Determinants KRUGMAN'S MACROECONOMICS for AP* 17 Margaret Ray and David.

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

Module Supply and Demand: Supply and Equilibrium KRUGMAN'S MACROECONOMICS for AP* 6 Margaret Ray and David Anderson.

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

Understanding the Business Cycle

Economic Growth in Macroeconomic Models

Simple Keynesian Model

Aggregate Demand and Aggregate Supply

Short Run Aggregate Supply

Module Inflation and Unemployment: The Phillips Curve

Section 4 Module 19.

Aggregate Supply and Aggregate Demand

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

Aggregate Equilibrium

Module Inflation and Unemployment: The Phillips Curve

Module Economic Growth in Macroeconomic Models

Please read the following License Agreement before proceeding.

Module Economic Growth in Macroeconomic Models

Equilibrium in the Aggregate Demand- Aggregate Supply Model

Long-Run Macroeconomic Equilibrium

Module Economic Growth in Macroeconomic Models

Section 4 Module 18.

Growth Policy: Why Economic Growth Rates Differ

Module Inflation and Unemployment: The Phillips Curve

Module Putting It All Together

Unit 3: Aggregate Demand and Supply and Fiscal Policy

Economic Growth in Macroeconomic Models

Aggregate Supply in the Short and Long Run

Unit 3: Aggregate Demand and Supply and Fiscal Policy

Aggregate Supply & Demand Model Part 2

Module Money, Output, and Prices in the Long Run

Unit 3: Aggregate Demand and Supply and Fiscal Policy

Unit 3: Aggregate Demand and Supply and Fiscal Policy

Module Money, Output, and Prices in the Long Run

Aggregate Equilibrium

SHORT-RUN ECONOMIC FLUCTUATIONS

AP Macroeconomics Economic Growth.

Aggregate Supply in the Short and Long Run

Module Putting it All Together

Chapter 9: Introduction to Economic Fluctuations

Module Aggregate Supply: Introduction and Determinants

Equilibrium Equilibrium price and quantity are found where the AD and AS curves intersect. At any price level above equilibrium sellers are faced with.

Module Aggregate Supply: Introduction and Determinants

Economics 020 Lecture 12 6 October, 1997.

Module Money, Output, and Prices in the Long Run

Equilibrium Equilibrium price and quantity are found where the AD and AS curves intersect. At any price level above equilibrium sellers are faced with.

Presentation transcript:

Module Economic Growth in Macroeconomic Models 40 KRUGMAN'S MACROECONOMICS for AP* Margaret Ray and David Anderson

What you will learn in this Module: How long-run economic growth is represented in macroeconomic models How to model the effects of economic growth policies

Distinguishing Between Long-run Growth and Short-run Fluctuations Remember: Long-run economic growth is the sustained rise in the quantity of goods and services the economy produces, as opposed to the short-run ups and downs of the business cycle. In the AD/AS model, a short-run fluctuation of the business cycle would be seen as a shift of the AD curve or SRAS curve. For example, a recessionary gap may result in a decrease in input prices and an increase in SRAS, but that does not mean the same thing as economic growth. Likewise, an inflationary gap results not in growth, but in a return of the economy to it’s long run equilibrium.

Long-run Economic Growth and the Production Possibilities Curve Long-run economic growth is the sustained rise in the quantity of goods and services the economy produces, as opposed to the short-run ups and downs of the business cycle. One of the earlier models discussed in the course was the PPC. Note: as a quick review, ask the students to choose any two goods/services and draw a PPC that illustrates increasing opportunity costs. They should be able to draw a concave PPC. Then ask them to identify a point in the graph that is currently unattainable. How would this economy ever hope to reach this unattainable combination of your two products? C C’ K K’

Long-run Economic Growth and the Aggregate Demand-Aggregate Supply Model In the aggregate demand and aggregate supply model, the long-run aggregate supply curve shows the relationship between the aggregate price level and the quantity of aggregate output supplied when all prices including nominal wages are flexible. The long-run aggregate supply curve is vertical at the level of potential output. While actual real GDP is almost always above or below potential output, reflecting the current phase of the business cycle, potential output is the level of output around which actual aggregate output fluctuates.