A fully detailed list of all essential diagrams for A-level Economics. This document includes all diagrams drawn out (digitally, so very clear) with labels and annotations. Also included are analysis of the diagrams and evaluation too, used in preparation for 2024 A-levels, this document helped me ...
Suppose government spending (G) rises. G is a component of
aggregate demand (AD). So higher G increases AD - AD shifts right
from AD to AD1.
This results in rising real GDP from Y to Y1 and a rising price level
from PL to PL1.
To move to the new equilibrium, there is an extension along the
aggregate supply curve.
Diagram Name / analysis
AS-AD; SRAS shift right
Suppose the prices of raw materials fall. This lowers business costs.
So short-run aggregate supply shifts right from SRAS to SRAS1.
This results in rising real GDP (Y to Y1) and falling price level (PL
to PL1).
To move to the new equilibrium, there is an extension along the AD
curve.
Diagram Name / analysis
AS-AD; LRAS shift right
An improvement in productivity shifts long-run aggregate supply
(LRAS) right from LRAS to LRAS1.
This raises real GDP (from Y to Y1) and lowers the price level from PL
to PL1.
To move to the new equilibrium, there is an extension along the AD
curve.
, 1
Diagram Name / analysis
AS-AD: SRAS and LRAS shift right
An increase in productivity will shift the LRAS as above. It may also
mean lower business costs,
shifting the SRAS to the right as well.
This combines the two previous diagrams.
Diagram Name / analysis
Trend Growth Rate
Diagram Name / analysis
AS-AD: AD shift right plus multiplier
The Multiplier Effect
Adding to the "AD shift right diagram", the multiplier effect causes a
second shift right in aggregate demand from AD1 to AD2.
Higher government spending on construction materials makes the
suppliers richer. This raises incomes of the suppliers' workers, so
those workers spend more in local shops.
● Y to Y1 is the initial government spending (P to P1).
● Y1 to Y2 is the multiplier effect (resulting in P1 to P2).
● Multiplier = Y2 - Y / Y1 - Y
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller hanmulv. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for £50.49. You're not tied to anything after your purchase.
