Course review
Review each learning objective in this topic, then open its concept explanation or question set.
Learning objective
• Aggregate demand equals consumption, investment, government spending, and net exports • AD = C + I + G + (X - M) • Diagram: AD curve
Start with the concept explanation, then practise to create mastery evidence.
Learning objective
• Consumption depends on consumer confidence, interest rates, wealth, income taxes, household debt, and expected future prices • Investment depends on interest rates, business confidence, technology, business taxes, and corporate debt • Government spending depends on political and economic priorities • Net exports depend on trading partner income, exchange rates, and trade policies • Diagram: shifts of the AD curve
Start with the concept explanation, then practise to create mastery evidence.
Learning objective
• SRAS depends on costs of factors of production and indirect taxes • Diagram: SRAS curve • Diagram: shifts of the SRAS curve
Start with the concept explanation, then practise to create mastery evidence.
Learning objective
• Monetarist and new classical models use a long-run aggregate supply curve • Keynesian models use a Keynesian aggregate supply curve • Models show inflationary and deflationary or recessionary gaps • Diagram: alternative views of the AS curve
Start with the concept explanation, then practise to create mastery evidence.
Learning objective
• LRAS or Keynesian AS can shift with quantity or quality of factors, technology, efficiency, and institutions • Diagram: shifts of LRAS or Keynesian AS
Start with the concept explanation, then practise to create mastery evidence.
Learning objective
• Short-run equilibrium occurs where AD intersects AS • Monetarist and new classical models determine long-run full employment equilibrium at potential output • In the monetarist or new classical model, automatic adjustment returns the economy to full employment and unemployment equals the natural rate of unemployment • In the Keynesian model, deflationary or recessionary gaps can persist • Diagram: macroeconomic equilibrium in short run and long run
Start with the concept explanation, then practise to create mastery evidence.
Learning objective
• Monetarist, new classical, and Keynesian models rely on different assumptions • Their implications differ for policy, adjustment, unemployment, and output gaps
Start with the concept explanation, then practise to create mastery evidence.