Aggregate Supply & Demand

Aggregate Demand (Scott’s Lecture)

An economy’s aggregate demand related to output.  

Monetary Policy is- (Scott’s Lecture)

Money supply & interest rates

Fiscal Policy is- (Scott’s Lecture)

government spending

PI stands for - (Scott’s Lecture)

Price of output market

Pf stands for- (Scott’s Lecture)

Price input market

LAS is - (Scott’s lecture)

wavier plan, capital, & technology

SAS is- (Scott’s Lecture)

a function of PI

The quantity of real GDP supplied

the total amount of final goods and services that firms in the United States plan to produce

The price level influences the quantity of real GDP demanded-

because a change in the price level brings a change in the buying power of money, real interest rate, real prices of exports and imports.

The factors that change aggregate demand are-

Expectations about the future, fiscal policy and monetary policy, the state of the world economy

What are two sources of inflation:

Demand-pull inflation & Cost-push inflation

Aggregate supply

the relationship between the quantity of real GDP supplied and the price level when all other influences on production plans remain the same

Aggregate demand

the relationship between the quantity of real GDP demanded and the price level when all other influences on expenditure plans remain the same.

Recessionary Gap

The economy is below full employment

Inflationary Gap

The economy is a​​​​bove full e​​​mployment

Real Business Cycle

The resulting cycle

demand-pull inflation

Inflation that starts because aggregate demand increases

cost-push inflation

Inflation that begins with an increase in cost

stagflation

The combination of a decreasing real GDP and a rising price level