Aggregate Demand and Aggregate Supply :: Economics

Topic 12 totality ingest and Aggregate Supply-----------------------------------------------1. Introduction2. Three Key concomitants about Economic Fluctuations2.1 Fact 1 Economics Fluctuations ar Irregular and Unpredictable2.2 Fact 2 Most Macroeconomic Quantities Fluctuate Together2.3 Fact 3 As return Falls, Unemployment Rises3. Explaining Short-Run Economic Fluctuations3.1 How the Short Run Differs from the eagle-eyed Run3.2 The Basic Model of Economic Fluctuations4. The Aggregate Demand bias4.1 Why the Aggregate Demand Curve Slopes Downwards4.2 Why the Aggregate Demand Curve May conjure5. The Aggregate Supply Curve5.1 Why the Aggregate Supply Curve is Vertical in the Long Run5.2 Why the Aggregate Supply Curve May Shift5.3 A New Way to Depict Long Run Growth and Inflation5.4 Why the Aggregate Supply Curve Slopes Upward in the Short Run5.5 Why the Short Run Aggregate Supply Curve May Shift6. two Causes of Economic Fluctuations6.1 The Effects of a Shift in Aggregate Demand6. 2 The Effects of a Shift in Aggregate Supply7. Summary2. Three Key Facts about Economic FluctuationsEconomic activity fluctuates from year to year.-----------------------------------------------In most years work of goods and services rises. On average overthe past 50 years, return in the U.S. economy has grown by about 3percent per year. In some years normal growth does not occur, causinga recession.- A recession is a period of declining real gross domestic product, falling incomes, and rising unemployment.- A depression is a severe recession.2.1 Fact 1 Economic Fluctuations are Irregular and Unpredictable- Economic fluctuations are irregular and unpredictable.- Fluctuations in the economy are often called the business cycle.2.2 Fact 2 Most macroeconomic variables fluctuate together Most macroeconomic variables that measure some type of income or production fluctuate closely together. Although many macroeconomic variables fluctuate together, they fluctuate by different am ounts.2.3 Fact 3 As output falls, unemployment rises- Changes in real GDP are inversely related to changes in the unemployment rate.- During times of recession, unemployment rises substantially.3. Explaining Short Run Economic Fluctuations- Most economists believe that classical theory describes the world in the pertinacious run plainly not in the short run.3.1 How the Short Run Differs from the Long Run- Changes in the money supply affect nominal variables but not real variables in the long run.- The assumption of monetary neutrality is not appropriate when studying year-to-year changes in the economy.3.2 The Basic Model of Economic Fluctuations============================================Two variables are used to develop a model to analyze the short-runfluctuations- The economys output of goods and services measured by real GDP.