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Aggregate demand and aggregate supply curvesKey points Aggregate supply is the total quantity of output firms will produce and sell—in other words, the real GDP. The upward-sloping aggregate supply curve—also known as the short run aggregate supply curve—shows the positive relationship between price level and real GDP in the short run. The aggregate supply curve slopes up because...0 Comentários 0 Compartilhamentos 7KB Visualizações 0 Anterior
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Interpreting the aggregate demand/aggregate supply modelKey points The aggregate demand/aggregate supply model is a model that shows what determines total supply or total demand for the economy and how total demand and total supply interact at the macroeconomic level. Aggregate supply is the total quantity of output firms will produce and sell—in other words, the real GDP. Aggregate demand is the...0 Comentários 0 Compartilhamentos 6KB Visualizações 0 Anterior
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Interpreting the aggregate demand/aggregate supply modelKey points The aggregate demand/aggregate supply model is a model that shows what determines total supply or total demand for the economy and how total demand and total supply interact at the macroeconomic level. Aggregate supply is the total quantity of output firms will produce and sell—in other words, the real GDP. Aggregate demand is the...0 Comentários 0 Compartilhamentos 5KB Visualizações 0 Anterior
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Law of SupplyKey points The law of supply states that a higher price leads to a higher quantity supplied and that a lower price leads to a lower quantity supplied. Supply curves and supply schedules are tools used to summarize the relationship between supply and price. Supply of goods and services When economists talk about supply, they mean the amount of some good...0 Comentários 0 Compartilhamentos 5KB Visualizações 0 Anterior
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Law of supplyKey points The law of supply states that a higher price leads to a higher quantity supplied and that a lower price leads to a lower quantity supplied. Supply curves and supply schedules are tools used to summarize the relationship between supply and price. Supply of goods and services When economists talk about supply, they mean the amount of some good...0 Comentários 0 Compartilhamentos 4KB Visualizações 0 Anterior
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Law of supplyKey points The law of supply states that a higher price leads to a higher quantity supplied and that a lower price leads to a lower quantity supplied. Supply curves and supply schedules are tools used to summarize the relationship between supply and price. Supply of goods and services When economists talk about supply, they mean the amount of some good...0 Comentários 0 Compartilhamentos 4KB Visualizações 0 Anterior
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Macroeconomic perspectives on demand and supplyKey points Keynes’ Law states that demand creates its own supply. Say’s law states that supply creates its own demand. Many mainstream economists take a Keynesian perspective—emphasizing the importance of aggregate demand—for the short run and a neoclassical perspective—emphasizing the importance of aggregate supply—for the...0 Comentários 0 Compartilhamentos 4KB Visualizações 0 Anterior
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Macroeconomic perspectives on demand and supplyKey points Keynes’ Law states that demand creates its own supply. Say’s law states that supply creates its own demand. Many mainstream economists take a Keynesian perspective—emphasizing the importance of aggregate demand—for the short run and a neoclassical perspective—emphasizing the importance of aggregate supply—for the...0 Comentários 0 Compartilhamentos 4KB Visualizações 0 Anterior
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Price elasticity of demand and price elasticity of supplyKey points Price elasticity measures the responsiveness of the quantity demanded or supplied of a good to a change in its price. It is computed as the percentage change in quantity demanded—or supplied—divided by the percentage change in price. Elasticity can be described as elastic—or very responsive—unit elastic,...0 Comentários 0 Compartilhamentos 5KB Visualizações 0 Anterior
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Aggregate demand in Keynesian analysisKey points Aggregate demand is the sum of four components: consumption, investment, government spending, and net exports. Consumption can change for a number of reasons, including movements in income, taxes, expectations about future income, and changes in wealth levels. Investment can change in response to its expected profitability, which in turn is shaped by...0 Comentários 0 Compartilhamentos 9KB Visualizações 0 Anterior
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Aggregate demand in Keynesian analysisKey points Aggregate demand is the sum of four components: consumption, investment, government spending, and net exports. Consumption can change for a number of reasons, including movements in income, taxes, expectations about future income, and changes in wealth levels. Investment can change in response to its expected profitability, which in turn is shaped by...0 Comentários 0 Compartilhamentos 7KB Visualizações 0 Anterior
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Beyond GDP: other ways to measure the economyKey points Gross national product, or GNP, includes what is produced domestically and what is produced by domestic labor and business abroad in a year. National income includes all income earned: wages, profits, rent, and profit income. Net national product, or NNP, is GNP minus depreciation. Depreciation is the process by which capital ages...0 Comentários 0 Compartilhamentos 8KB Visualizações 0 Anterior
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Changes in equilibrium price and quantity: the four-step processKey points There is a four-step process that allows us to predict how an event will affect the equilibrium price and quantity using the supply and demand framework. Step one: draw a market model (a supply curve and a demand curve) representing the situation before the economic event took place. Step two: determine whether the economic event being analyzed affects demand...0 Comentários 0 Compartilhamentos 8KB Visualizações 0 Anterior
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Changes in equilibrium price and quantity: the four-step processKey points There is a four-step process that allows us to predict how an event will affect the equilibrium price and quantity using the supply and demand framework. Step one: draw a market model (a supply curve and a demand curve) representing the situation before the economic event took place. Step two: determine whether the economic event being analyzed affects demand...0 Comentários 0 Compartilhamentos 7KB Visualizações 0 Anterior
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Command-and-control regulationKey points Command-and-control regulation sets specific limits for pollution emissions and/or mandates that specific pollution-control technologies that must be used. Although such regulations have helped to protect the environment, they have three shortcomings: they provide no incentive for going beyond the limits they set; they offer limited flexibility on where and...0 Comentários 0 Compartilhamentos 6KB Visualizações 0 Anterior
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Command-and-control regulationKey points Command-and-control regulation sets specific limits for pollution emissions and/or mandates that specific pollution-control technologies that must be used. Although such regulations have helped to protect the environment, they have three shortcomings: they provide no incentive for going beyond the limits they set; they offer limited flexibility on where and...0 Comentários 0 Compartilhamentos 6KB Visualizações 0 Anterior
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Comparing GDP among countriesKey Points Since GDP is measured in a country’s currency, in order to compare different countries’ GDPs, we need to convert them to a common currency. One way to compare different countries' GDPs is with an exchange rate, the price of one country’s currency in terms of another. GDP per capita is GDP divided by population....0 Comentários 0 Compartilhamentos 6KB Visualizações 0 Anterior
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