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Chapter 12. Aggregate Demand and Aggregate Supply
Link to syllabus
Skip “Why the AD Curve is Downward Sloping;’ pp. 343-44 and Figures 12-2, 12-3
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The AD-AS Model. Fig. 12-11, p. 361
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Shifts of Aggregate Demand Fig. 12-4, p. 346
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Factors that Shift Aggregate Demand, pp. 346-47.
Expectations
Wealth
Investment (and physical capital)
Fiscal Policy
Monetary Policy
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Shifts of Aggregate Supply. Fig 12-6, p. 353.
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The Short Run AS Curve in the Depression. Fig 12-5 p. 352
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Factors Shifting Short Run Aggregate Supply. pp. 353-55
Commodity Prices,
Nominal Wages,
Productivity
Book doesn’t specifically mention here, but could,
‘Supply side’ factors such as gov’t regulation and business taxes.
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The AD-AS Model. Fig. 12-11, p. 361
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Long Run Macroeconomic Model. Fig. 12-14, p. 365
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Long Run Aggregate Supply. Fig. 12-7, p. 356
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Actual and Potential Output. Fig 12-8 p. 357
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From the Short Run to the Long Run. Fig 12-9, p. 359
At A1, there is excess demand, eventually raising prices and wages, which will push the SRAS curve up and to the left.
Opposite story. At this A1there is unemployment,and eventually wages fall,pushing SRAS down and to the left.
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Figure 12.12, p. 362. Demand Shocks.
These are the short run impacts. Long run impacts are treated later.
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Supply Shocks. Figure 12.13, p. 363.
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Short-Run vs. Long-Run Effects of a Negative Demand Shock. Fig 12-15, p. 365
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Short-Run versus Long Run Effects of a Positive Demand Shock. Figure 12.16 p. 367
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Global Comparison: Supply Shocks (p. 364)
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Global Comparison. P. 338 Previous Edition. The Supply Shock of 2007-08.
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Negative Supply Shocks are Rare, and Nasty. Fig 12-17, p. 368.
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Has Stabilization Policy been Stabilizing? Fig. 12-18, p. 371.