MGEB06H3 Chapter : Week 10 chapter notes

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lavenderdonkey6

6 Dec 2010

School

UTSC

Department

Economics for Management Studies

Course

MGEB06H3

Professor

Jack Parkinson

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Document Summary

How the short run and the long run differ. The model of aggregate supply and aggregate demand. N when prices are fixed, output also depends on the demand for goods and services. N aggregate demand (ad) the negative relationship between the price level and the aggregate quantity of output demanded that arises from the interaction between the goods market and the money market. The long run: the vertical aggregate supply curve. The short run: the horizontal aggregate supply curve. From the short run to the long run. N monetary policy is an important component of stabilization policy because the money supply has a powerful impact on ad. Summary: economies experience short-run fluctuations in economic activity, measured most broadly by real gdp. These fluctuations (business cycles) are evident in many macroeconomic variables. In particular, when gdp growth declines, the unemployment rate rises above its natural rate.

Related Questions

Economists forecast future economic conditions by studying variables that tend to fluctuate in advance of the overall economy. The most significant of these variables are known as leading indicators, and they compose the index of leading economic indicators.

Which of the following variables are measured as part of this index? Check all that apply.

The interest rate spread

Consumer expectations

Stock prices

Hours worked by manufacturing workers

Technological advances

True or False: Short-run economic forecasts give the government useful information regarding expected tax revenues, but are not relevant to businesses because they cannot adjust output in the short run.

True

False

Most economists use the aggregate demand and aggregate supply model primarily to analyze

a. short-run fluctuations in the economy.

b. the effects of macroeconomic policy on the prices of individual goods.

c. the long-run effects of international trade policies.

d. productivity and economic growth.

yellowdog130

In 200 words or more, Why do economists focus on GDP, inflation, and unemployment when assessing the health of an entire economy? Why does greater flexibility of prices as time passes cause economists to utilize different macroeconomic models for different time horizons? Original work, please

olivegrasshopper228

MGEB06H3 Chapter : Week 10 chapter notes

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