Chapter23OutputandPricesintheShortRun..pptVIP

What do we mean by an exogenous increase or decrease in prices ? The Canadian price level (P) increases for some reason not explained as part of our macroeconomic story. Example - natural resource prices in world markets increase causing Canadian natural resources prices to rise and this feeds through to production costs and ultimately P (the general price level). Or - a new Gov’t safety regulation causes all prices to go up. * of 36 Copyright ? 2008 Pearson Education Canada Chapter 23 Output and Prices in the Short Run * In this chapter you will learn 1. why an exogenous c