SOLUTION Use a submit and supply model for the whole economy 115 gather DEMAND Planned expending (C+ I + G + X M) at different equipment casualty levels as measured b d by the gross domestic product deflator 116 AGGREGATE DEMAND CURVE Price level AD 0 RGDP 117 1 AGGREGATE DEMAND CURVE slopes downward Real income frame Real wealth load Substitution (international) effect when and where Interest rate effect (a) level prices associated with lower interest rates lenders lend money abroad and local depreciates demand pluss for exports (b) Lower interest rates increase investment demand (c) Lower interest rates increase consumption demand 118 AGGREGATE DEMAND CURVE slopes downward Exchange rate effect cash Depreciation (fall in value of local currency in FOREX markets lowers export prices and increases import prices) increases demand for exports and reduces demand for imports Currency Appreciation (increase in value of local currency in FOREX markets increases export prices and decreases import prices) decreases demand for exports and increases demand for imports 119 Shifts in the AD curve Any change in the determinants of Consumption PL Investment political relation AD0 XM 0 With particular emphasis on fiscal and monetary policy AD1 RGDP 120 2 swindle Run Aggregate Supply direct of RGDP at different price levels Price level SAS 0 RGDP 121 footling Run Aggregate Supply Short run is the period when close to resources are fixed Price level can transfigure b t i Pi l l but input prices are t i fixed 122 toss of Short Run Aggregate Supply Suppliers supply more at higher prices More profit at existing price levels Marginal suppliers produce as are profitable at higher price levels and existing cost levels 123 3 Shift of Short Run... If you want to get a full essay, order it on our website: Ordercustompaper.com
If you want to get a full essay, wisit our page: write my paper
No comments:
Post a Comment