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Aggregate Demand and Aggregate Supply (Three key facts about Economic…
Aggregate Demand and Aggregate Supply
Three key facts about Economic Fluctutation
Economic fluctuations are Irregular and Unpredictable
Most macroeconomic variables fluctuate together
As output falls, unemployment rises
The Aggregate-Demand curve
Downward sloping
The Wealth effect
The Interest-rate effect
The Exchange-rate effect
Shift to Right/Left
Increase/Decrease in Consumption
Increase/Decrease in Investment
Increase/Decrease in Government expenditure
Increase/Decrease in Net exports
The Aggregate-Supply curve
The Long-run AS
Vertical
Shift the LRAS
Natural level of output
Changes in Labor
Changes in Captial
Changes in Natural Resources
Changes in Technological Knowledge
The Short-run AS
Upward sloping
The Sticky-Wage theory
The Sticky-Price theory
The Misperceptions theory
Shift the SRAS
Changes in Labor
Changes in Capital
Changes in Natural Resources
Changes in Technological Knowledge
Change in the Expected price
Explaining Short-run Economic Fluctuations
The assumptions of Classical Economics
The classical dichotomy
The monetary neutrality
The Reality of Short-run Fluctuations
The Model of AD and AS
Two Causes of Economic Fluctuations
A shift in AD
Causes fluctuations in Y
Affects the P in the Long-run, but do not affect Y
Policymakers can potential affect AD
A shift in AS
Affects Y and P
Policymakers
Do nothing
Take action to AD
Vietnam-Netherlands Programme - 2017
Do Huu Luat