Economics (eac594)

Due to developments in technology, environmental concerns, and government incentives, this sector has attracted a lot of interest and grown noticeably in recent years

test

case 1

test, assignments, summaries

-This chapter examines why real GDP might be unstable and subject to cyclical fluctuations. -The revised model adds realism by including the foreign sector and government in the aggregate expenditures model. -Applications of the new model include two U.S. historical periods and the current situation in Japan. The focus remains on real GDP

aggregate supply - effects of output on price level

AS-AD Equilibrium in Short, Medium Run

-This chapter and the next focus on the aggregate expenditures model.We use the definitions and facts fromprevious chapters to shift our study to the analysis of economic performance.The aggregate expenditures modelis one tool in this analysis.Recall that "aggregate" means total. -As explained in this chapter's Last Word, the model originated with John Maynard Keynes (Pronounced Canes). -The focus is on the relationship between income and consumption and savings. -Investment spending, an i...

-Recent focus on the long-run adjustments and economic outcomes has renewed debates about stabilization policy and causes of instability. -This chapter makes the distinction between short-run and long-run aggregate supply. -The extended model is then used to glean new insights on demand-pull and cost-push inflation. -The relationship between inflation and unemployment is examined; we look at how expectations can affect the economy, and assess the effect of taxes on aggregate supply.

-Characteristics of the Market System -The Market System at Work -Competition and the "Invisible Hand"