Macro Econ Unit 2 Lecture 2 SHIFTS

Change in income

Shifts AD, consumption, changes willingness in aggregate buyers

def. money income that enters house

ex. stimulus check

Change in confidence

Shifts AD, consumption, changes willingness in aggregate buyers

def. psychological impact, gut feeling, mindset about future state of economy

ex. optimism= more spending

Change in wealth

Shifts AD, consumption, changes willingness in aggregate buyers

def. changes in value of assets

ex. value of stock portfolio increase

Change in interest rates

Shifts AD, consumption, changes willingness in aggregate buyers

Interest rate impacts disposable income

ex. decreases interest rate = increases spending

Change in taxes

Shifts AD, consumption, changes willingness in aggregate buyers

def. levy that changes disposable income

ex. income tax increases

Change in interest rates

Shifts AD, investment, changes willingness in aggregate buyers

def. fee incurred for borrowing money

ex. banks decrease rates to encourage lending

Change in expected returns

Shifts AD, investment, changes willingness in aggregate buyers

def. belief that output demanded will change w the economic conditions

ex. cancel new equipment order bc fear of economic downturnC

Change in technology

Shifts AD, investment, changes willingness in aggregate buyers

def. buy new tech to create more or enhance profit

ex. buy new ai machine

Change in public good

Shifts AD, government, changes willingness in aggregate buyers

def. g/s meant for public use

ex. highways

Change in public threat

Shifts AD, government, changes willingness in aggregate buyers

def. g/s meant to protect the public

ex. weapons for Ukraine

Change in economic stability

Shifts AD, government, changes willingness in aggregate buyers

def. government intervention in economy after economic shock

ex. Covid 19 “cares” act

Change in foreign economic conditions

Shifts AD, net exports, changes willingness in aggregate buyers

def. Foreign nations can impact domestic RGDP

ex. German citizens earning more money = buy more US goods

Change in exchange rates

Shifts AD, net exports, changes willingness in aggregate buyers

def. conversion of currency favors one nation over another

ex. British pound buys less US dollars, US g/s are more expensive

Change in input costs

Shifts SRAS, changes willingness in aggregate sellers

def. the price of an input needed for production in many firms has changed

ex. price of electricity increases

Change in temporary disruptions

Shifts SRAS, changes willingness in aggregate sellers

def. an unforeseen event occurs which disrupts output or input prices, can be positive

ex. hurricane damages roads but can be fixedC

Change in resource availability

Shifts SRAS and LRAS, changes willingness and potential in aggregate sellers

def. the physical amount of inputs changes

ex. another oil well discoveredCh

Change in productivity

Shifts SRAS and LRAS, changes willingness and potential in aggregate sellers

def. changes to amount of output can be achieved through capital or human innovation/health

ex. new computers

Change in size of labor force

Shifts SRAS and LRAS, changes willingness and potential in aggregate sellers

def. the number of people who can work changes

ex. immigration into a country

Change in government regulations

Shifts SRAS and LRAS, changes willingness and potential in aggregate sellers

def. changes to the rules of commerce

ex. minimum wage, limits on pollution