Karteikarten
Intro
Karten in diesem Stapel (15)
- 1So far ...How do we measure economic growth? Real GDP
3 approaches to measure Real GDP
What Real GDP measures and does not?
Introduction to National income accounting
In Short-run Real GDP fluctuates around the trend-line
Fluctuations are called "Business-cycles" - 2Next...Why does real GDP fluctuate in the short-run?
Linkage between spending (AD) & Output (Y)
How is Y determined in the Short-run?
Study Keynesian model of Income (Output) determination
Multiplier effect - 3Short-run : AssumptionsPrices fixed;
Actual Output < Potential Output
ie., Output gap < 0
Firms are willing to sell any amount at the given level of price - 4Show the relationship between AD & Y in the short-run
- 5Short-run Output
- 6Long-run: AssumptionsOutput fixed at at Y¯ = Yfull
Economy performs at its output potential - 7Show the relationship between AD & Y in the long-run
- 8Prices : flexible vs stickyFlexible : Air Ticket, Hotels, Share price
Sticky : Durable goods, Wages - 9When are prices sticky / flexible?Prices are flexible in the Long-run
Prices are sticky in the short-run - 10Effect of sticky prices in Short-runGiven that Output is fixed in short-run,
and Prices (Wages) Sticky,
As economic conditions change --> AD changes --->Prices dont change to adjust to the equilibrium ---> AD not equal to Yfull --->Sustained periods of over / under employment --->Output gap not equal to 0 - 11Effect of flexible prices in long-runAs economic condition changes --> AD Changes ---> Wages/Prices Change --->Output and employment stays constant at full employment level AD = Y¯
- 12What are business cycles?Fluctuations in the Output in the short-run
- 13Why do we experience fluctutaions in output in shrt-run?because of price rigidity in the short-run and the change in aggregate demand
- 14What causes changes in the AD?change in any of the components :
C,I,G,NX - 15Why are prices rigid in the short-run?wage stickiness
Informationen
- Beschreibung
- 1 Macroeconomics (Module 2) Karteikarten am Intro, erstellt von Mukundhan Srinivasan am 20/10/2015.
- Erstellt von
- Mukundhan Srinivasan · Okt 2015
- Aktualisiert
- 19 Feb 2016
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