EC140 Study Guide - Midterm Guide: Kuznets Curve, Knowledge Transfer, Cheque Clearing

• School: WLU
• Department: Economics
• Course: EC140
• Professor: All

Document Summary

Chapter 23: aggregate demand and aggregate supply and macroeconomic. Chapter 24: adjustment of factor prices and fiscal policy. Chapter 27: money, interest rates and economic activity. Chapter 23: aggregate demand and aggregate supply and. The money that people hold can buy fewer goods. Ad curve shows level of real gdp for each price level where desired aggregate expenditure equals actual gdp. Equilibrium output from the simple macro model for each price level. All three changes mean that as price rise, real gdp falls. Move up and left along the ad curve. If ae shifts up, ad increases and the ad curve shifts right. As ae shifts up, real gdp increases. As (aggregate supply) curve shows for each price level the amount of output firms would like to produce and sell. Many firms face diminishing returns to scale. Production constrains often minor when output is low. Companies move to costlier methods to increase output. Slope of the as curve is increasing.