Docstoc

Aggregate Demand and Aggregate Supply - Download Now PowerPoint

Document Sample
Aggregate Demand and Aggregate Supply - Download Now PowerPoint Powered By Docstoc
					Aggregate Demand and
  Aggregate Supply
      Quick review
• Draw an AD & AS diagram to show the
  impact of an increase in government
  spending on national income and the price
  level in the UK economy.
                AD2        LRAS
Price    AD1
Level




    P2
    P1
         SRAS



                Y1    Y2   YFE    Y
• Draw an AD & AS diagram to show the
  impact of a recession in the Eurozone on
  the
                     AD1
               AD2
                               LRAS
Price
Level




   P1
   P2

        SRAS



                      Y2   Y1 YFE
                                      Y
         Pause for thought?
• When there is an injection in to the circular
  flow, how big is the increase in national
  income likely to be?

				
DOCUMENT INFO