Macroeconomics/ Dual Enrollment

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28 Οκτ 2013 (πριν από 3 χρόνια και 11 μήνες)

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Macroeconomics/ Dual Enrollment

Unit 5” Aggregate Demand and Aggregate Supply”

Assignment



Flashcards/Vocabulary



Aggregate Demand



Foreign

Sector

Substitution Effect



Interest rate effect



Wealth effect



Determinants of AD



Short
-
run AS (SRAS)



Macroeconomic
short run



Macroeconomic long run



Determinants of AS



Macroeconomic Equilibrium



Recession gap



Inflationary gap



Demand
-
pull inflation



Deflation



Recession




Review Questions (worksheet)



Extended
-
response Questions

/ See mater academy website.

1.

Using the model of

AD and AS, what happens to real GDP, the price level, and unemployment
with more consumption spending?

2.

Define Aggregate Demand (AD) and list the factors (components) of the aggregate
demand that shift the AD curve.

3.

Describe the shape of the AD curve. Why does the aggregate demand curve have a
downward slope?

4.

Describe the foreign sector substitution effect, the interest rate effect, and the wealth
effect in the AD

5.

Define aggregate supply (AS).

6.

What is the meaning of

short run and long run in the economy?

7.

Explain both the macroeconomic short
-
run model and the long
-
run model of the AS.
What is the best way to describe the AS curve in the long run?

8.

Li st the basi c factors that affect short
-
run AS. Expl ai n the effect of
each factor.

9.

Li st the basi c factors that affect both short
-
run AS and l ong
-
run AS. Expl ai n the effect of each factor. Li st
the factors that affect the level of full employment.

10.

Draw an aggregate supply/aggregate demand diagram. Label the axes of your diagr
am.
Make the aggregate supply curve upward sloping. Show which curve shifts when
foreigners suddenly develop a distaste for our products. What will happen to
equilibrium price level in the short run?

11.

Would you expect the same thing to happen to equilibriu
m output and the equilibrium
price level in the long run? Redraw the aggregate supply/aggregate demand diagram
using a vertical aggregate supply curve. Now what happen when foreigners develop
distaste for our products?

12.

Explain why the long run aggregate su
pply curve is draw as a vertical line and the short
run aggregate supply curve is draw upward sloping? Explain why the long run effects of
a change in foreign tastes are different from the short run effects.

13.

Using the model of AD and AS, what happens to re
al GDP; the price level, and
unemployment with more consumption spending?

14.

Explain the Inflation and unemployment Trade
-
off. Explain and show the Phillips curve
in the short
-
run. Explain and show the Phillips curve in the long
-
run.

15.

What is the main contrast

between the short
-
run and long
-
run Philips curve?