Econ 4.3

Wednesday, February 10, 1999

Announcements: The online quizzes are up on the webpage. They are worth a maximum of 10 points each. You need a 70% or higher to get the points and you can take it up to three times. Homework assignment #2 is up on the web. It is due Friday, February 12. A revised copy of the syllabus was handed out today.

Lecture notes:  

AD Curve Shifters

• AD = C + I + G + (EX - IM)
• AD Shifts right when C, I, G, EX increases, IM decreases
• AD Shifts left when C, I, G, EX decrease, IM increases

Aggregate Supply Curve

• Total supply of goods and services produced in the economy
• Willingness to produce GDP
• Aggregate supply curve (AS) slopes upward

Macroeconomic Equilibrium

Aggregate Demand and Supply (Annual)

• AD Shifts to the Right -- Quantity Output Increased
• AD Curve Shifts to the Right -- Inflationary Growth
• AS Curve Shifts to the Right -- Deflationary Growth
• AD Curve Shifts to the Left -- Recession
• AS Curve Shifts to the Left -- Stagflation