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RIR

Various Graphs. AS. NIR. MS. PL. RGDP. Good x. PF. PPF. MD. AD. Good y. MC. LS. RWR. QM. RGDP. MB. LD. Labor. Loanable Funds. Goods & Services. Labor. P. S. LS. RIR. RWR. SLF. Surplus Market effecting Price Floor. shortage, Market effecting Price Ceiling. D. LD.

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RIR

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  1. Various Graphs AS NIR MS PL RGDP Good x PF PPF MD AD Good y MC LS RWR QM RGDP MB LD Labor Loanable Funds Goods & Services Labor P S LS RIR RWR SLF Surplus Market effecting Price Floor shortage, Market effecting Price Ceiling D LD DLF Q Labor LF DurpluD Deficit SLF PSLF RIR RIR RIR PSLF SLF DLF DLF LF LF

  2. _____________Market _____________Market GraphChapter PPF 3 S/D 4 PF 8 LS/LD 9 GraphChapter SLF/DLF 10 MS/MD 12 AS/AD 13

  3. PPF & PF Good x RGDP PF Attainable, efficient Unattainable Unattainable Attainable, inefficient Attainable PPF GOOD y Labor

  4. S Firms Supply Goods and Services P P S1 S2 S2 S1 D D Q Q • CURVE SHIFTS: • $price of good/service (graphed) = $ qty S • #price of substitute in production = $ S • $price of complement in production = $ S • #resource price or other input price = $ S • Future Prices expected to # = $ S • $number of sellers = $ S • $productivity = $ S

  5. D Households Demand Goods and Services P P S S D1 D2 D2 D1 Q Q • CURVE SHIFTS: • $price of good/service (graphed) = $ qty D • $price of substitute in consumption = $ D • #price of complement in consumption = $ D • Income # (inferior good) = $ D • Income $ (normal good) = $ D • Future Prices expected to $ = $ D • Future Income expected to $ = $ D • $number of buyers = $ D • r in preferences = $ D (item A) and # D (item B)

  6. LS HOUSEHOLDS Supply Labor RWR RWR LS1 LS2 LS2 LS1 LD LD LABOR LABOR • CURVE SHIFTS: • $ LS = #income taxes • $ LS = #unemployment benefits • $ LS = $population

  7. LD FIRMS Demand Labor RWR RWR LS LS LD2 LD1 LD1 LD2 LABOR LABOR • #LD = #Productivity

  8. SLF RIR RIR SLF1 SLF2 SLF2 SLF1 DLF DLF LF LF • CURVE SHIFTS: • # SLF = #Disp. income • # SLF = $Wealth • # SLF = $Exp. Future income

  9. DLF RIR RIR SLF SLF DLF2 DLF1 DLF1 DLF2 LF LF • CURVE SHIFTS: • # DLF = #Exp. profit • Bus. Cycle expansion • Technology, successful new products • # Population

  10. MS MS1 MS2 MS2 MS1 NIR NIR MD MD QM QM • LONG RUN: • Fed makes Open Mkt purchase #Qty $$ NIR $ RIR  • #borrowing/investing (spending habits change)  • change in production and prices • Thus, Shortrun NIR adjusts, Longrun PL adjusts • Short run # qty$ = $IR • Long run  # qty$ = #price level • #V = #inflation rate • CURVE SHIFTS: • $ MS = #RRR • $ MS = #Disc rate • $ MS = Selling Securities • $ MS = banks make smaller or less loans • $ MS = people deposit less money

  11. MD MS MS NIR NIR MD2 MD1 MD1 MD2 QM QM • CURVE SHIFTS: • # MD = #PL • # MD = #RGDP • Financial Technology • # MD = #ATMs • $ MD = #Credit Cards

  12. AS PL PL AS1 AS2 AS2 AS1 AD AD RGDP RGDP LONG RUN: #price level  #MD  #NIR  #RIR  $spending  $qty RGDP demanded  $AD #price level  $RWR • CURVE SHIFTS: • # AS = #Pot. GDP • # AS = $MWR • # AS = $Money price of other resource

  13. AD PL PL AS AS AD2 AD1 AD1 AD2 • CURVE SHIFTS: • # AD = #Exp. Future income, inflation, profits • #AD = $taxes • # AD = #Transfer pmts/Govt. Expenditure • # AD = #qty money • #AD = $Interest rate • #AD = #ForeignIncome • #AD = #Global economy (expands) • # AD = $Exchange rate RGDP RGDP #exchange rate (from 100yen to 125 yen for $1) = cheaper foreign goods (12,500yen goes from $125 to $100) = #imports (we buy more of their goods) = $AD (and less of ours)

  14. SURPLUS WAGE P LS S LABOR SURPLUS SURPLUS LD D LABOR Q

  15. SHORTAGE WAGE P LS S SHORTAGE LABOR SHORTAGE LD D LABOR Q

  16. The Real World is ONE BIG RIPPLE . . .

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