Log in
HomeClass Notes1,200,000CA670,000

ECON 105 Lecture Notes - Lecture 6: Aggregate Demand, Aggregate Supply, Canter And Gallop

60 views13 pages
School
Simon Fraser University
Department
Economics
Course
ECON 105
Professor
Seong- Jun Choi

For unlimited access to Class Notes, a Class+ subscription is required.

tianjin and 38107 others unlocked
ECON 105 Full Course Notes
17
ECON 105 Full Course Notes
Verified Note
17 documents

Document Summary

Chapter 23: output and prices in the short run. Objective: why an exogenous change in the price level shifts the ae curve and changes the equilibrium level of real gdp. How to derive the aggregate demand (ad) curve and what causes it to shift. The meaning of the aggregate supply (as) curve and why it shifts when productivity or factor prices change. How aggregate demand and aggregate supply shocks affect real. Gdp and the price level: the demand side of the economy. The simple sr macro models we have dealt with in previous chapters are built with an assumption of the _________________ price level ( = pl). In this chapter, we need to understand how changes in price level affect demand determined output. The desired ae curve shifts in response to a change in pl. A rise in pl a reduction in the real value of the private sector"s wealth a decrease in ________________ desired consumption expenditures a.

Get access

Grade+
$40 USD/m
Billed monthly
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
10 Verified Answers
Class+
$30 USD/m
Billed monthly
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
7 Verified Answers

Related Documents

ECON 105 Lecture 5: CHP23
ceriseshark549
ECON 105 Chapter Notes - Chapter 23: Aggregate Supply, Aggregate Demand, European Cooperation In Science And Technology
taupeelephant406
ECON 105
Final Exam
Study Guide
ECON 105 Study Guide - Final Guide: Consumption Function, National Research Universal Reactor, Phillips Curve
cerisegiraffe538

Related Questions

1. According to classical macroeconomic theory, changes in the money supply affect:

a. real GDP and the price level.

b. real GDP but not the price level.

c. the price level, but not real GDP.

d. neither the price level nor real GDP

 

2. Aggregate demand shifts right if:

a. government purchases increase and shifts left if stock prices rise.

b. government purchases increase and shifts left if stock prices fall.

c. government purchases decrease and shifts left if stock prices rise.

d. government purchases decrease and shifts left if stock prices fall.

10,A change in the price level​ ________ the AE curve and​ ________ the AD curve.
A.
​shifts; shifts
B.
has no effect​ on; results in a movement along
C.
results in a movement​ along; results in a movement along
D.
results in a movement​ along; shifts
E.
​shifts; results in a movement along

17,When the price level​ falls, the aggregate planned expenditure curve shifts​ ________, equilibrium expenditure​ ________ and there is a movement​ ________ along the aggregate demand curve.
A.
​upward; increases; upward
B.
​downward; decreases; downward
C.
​upward; decreases; downward
D.
​upward; increases; downward
E.
​downward; increases; upward

21,Which of the following increases the size of the expenditure​ multiplier?
A.
an increase in autonomous spending
B.
a decrease in the marginal propensity to consume
C.
a decrease in the marginal propensity to import
D.
an increase in the marginal income tax rate
E.
an increase in investment

23,If the quantity of real GDP demanded is greater than the quantity of real GDP​ supplied, then
A.
the price level falls and firms decrease production.
B.
aggregate demand changes to restore equilibrium.
C.
the economy must be producing at potential GDP.
D.
the price level falls to restore the macroeconomic equilibrium
E.
the price level rises and firms increase production.


24, ________ can trigger an expansion.
A.
Equality between aggregate expenditure and real GDP
B.
A decrease in induced expenditure
C.
A downward shift of the AE line
D.
An increase in autonomous expenditure
E.
A decrease in autonomous expenditure


1. Discuss the difference between an increase in the aggregate demand curve and an increase in the quantity of real GDP demanded. Include a discussion of how the price level relates to each event.

2. What are the major factors that determine investment, and what impact does each have on aggregate demand?

3. Describe the difference between a microeconomic demand curve and an aggregate demand curve.

4. The aggregate demand curve portrays the relationship between the price level and real GDP. What are the three reasons this relationship is a negative or inverse relationship? Provide brief illustrations of each.

5. What role do imports play in aggregate demand? Under which conditions will changes in imports expand aggregate demand? Reduce aggregate demand?

6. Shifts in the Aggregate Supply Curves

List and discuss the things that will make the Short Run Aggregate Supply curve shift to the left or to the right. Illustrate.

List and discuss the things that will make the Long Run Aggregate Supply curve shift to the left or to the right. Illustrate.

7. What is the natural level of output?