[经济学]ch20-aggregate demand and aggregate supply.pptVIP

In this chapter, look for the answers to these questions: What are economic fluctuations? What are their characteristics? How does the model of aggregate demand and aggregate supply explain economic fluctuations? Why does the Aggregate-Demand curve slope downward? What shifts the AD curve? What is the slope of the Aggregate-Supply curve in the short run? In the long run? What shifts the AS curve(s)? Introduction Over the long run, real GDP grows about 3% per year on average. In the short run, GDP fluctuates around its trend. recessions: periods of falling real incomes and rising unemployment depressions: severe recessions (very rare) Short-run economic fluctuations are often called business cycles. Three Facts About Economic Fluctuations FACT 1: Economic fluctuations are irregular and unpredictable. Three Facts About Economic Fluctuations FACT 2: Most macroeconomic quantities fluctuate together. Three Facts About Economic Fluctuations FACT 3: As output falls, unemployment rises. Introduction, continued Explaining these fluctuations is difficult, and the theory of economic fluctuations is controversial. Most economists use the model of aggregate demand and aggregate supply to study fluctuations. This model differs from the classical economic theories economists use to explain the long run. Classical Economics—A Recap The previous chapters are based on the ideas of classical economics, especially: The Classical Dichotomy, the separation of variables into two groups: real – quantities, relative prices nominal – measured in terms of money The neutrality of money: Changes in the money supply affect nominal but not real variables. Classical Economics—A Recap Most economists believe classical theory describes the world in the long run, but not the short run. In the short run, changes in nominal variables (like the money supply or P ) can affect real variables (like Y or the u-rate). To study the short run, we use a new model. The Model of A