MACROECONOMICS BU 204

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28 Οκτ 2013 (πριν από 3 χρόνια και 9 μήνες)

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MACROECONOMICS

BU 204


Seminar

Seven

Agenda


Course Issues and Questions


Chapter Twelve Concepts and Q&A


Where are we going next?



Government Spending to Combat a Recession

Increase in
government
spending

Increase in the
aggregate
demand curve

Increase in the
price level and
the real GDP

$6

$6.1

AS

$155

$160

Real GDP

E
2

E
1

Using Fiscal Policy to Combat Inflation

E
´

full
employment

AD
1

AD
2

Decrease in
government spending
or increase in taxes

Decrease in the
aggregate demand
curve

Decrease in the
price level

Increase in
real GDP

Tax collections rise and
government transfer
payments fall

Budget surplus
offsets inflation

Decrease in
real GDP

Tax collections fall and
government transfer
payments rise

Budget deficit
offsets recession

13

13

Chapter 12 Questions

13

13

Using aggregate demand, short
-
run aggregate supply, and long
-
run aggregate supply curves, explain the process and causes by
which each of the following economic events will move the
economy from one long
-
run macroeconomic equilibrium to
another. Use the diagrams below, resizing them as necessary, to
illustrate your analysis. In each case, what are the short
-
run and
long
-
run effects on the aggregate price level and aggregate
output?


a. There is a decrease in households’ wealth due to a decline in
the stock market (
15 points
).


b. The government lowers taxes, leaving households with more
disposable income, with no corresponding reduction in
government purchases (
15 points
).



Macroeconomics


BU204



Homework:

Question:



1. Use the Kaplan electronic library and databases to research
and compose a 5
-
paragraph essay (APA format) to identify a
minimum of 3 economic concepts and/or theories from this
course and how they relate to some current event (properly cite
a minimum of three electronic references). (10 points)



2. Record the methods you used to discover these sources. (10
points)



3. Which data bases did you search? What combination of
search terms did you use? Which methods resulted in the most
hits? Which methods resulted in few or no hits? (10 points)


Macroeconomics

Questions?