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Macroeconomy :silhouettes: - Coggle Diagram
Macroeconomy :silhouettes:
Inflation :star:
Cost push
wages, capital goods, raw materials
Prices increase, wages increase too
demand pull
Desinflation
(E.g: from 10% to 8%)
Deflation :star:
BAD DEFLATION: Decease in prices, decrease in GDP of the country AD FALLS
GOOD DEFLATION: prices drop, GDP increases (AS increases- moves to the right)
GDP :star:
What a country prodcuces in a year
Aggregate demand
Macroeconomic equilibrium
AD= Consumption (household spending) + Investment (private) + Government spending + Net Exports (Exports - imports)
Aggregate Suppy
Long-run
Short-run
Keynessian vs. Classical economies
Keynessians believed that government should intervene in the economy.
Classical: Adam Smith: FREE market, no need to intervene
BALANCE OF PAYMENTS
how much de country is exporting & importing
Current account:
Capital account