1 / 5

Intermediate Macroeconomics ECON 15575084

Intermediate Macroeconomics ECON 15575084. Dr. Andrew L. H. Parkes “A Macroeconomic Understanding for use in Business” Day 7. 卜安吉. P. P 1. AD2. AD 1. Y. Y 1. Y 2. 0. Why the AD Curve Might Shift.

keisha
Download Presentation

Intermediate Macroeconomics ECON 15575084

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Intermediate MacroeconomicsECON15575084 Dr. Andrew L. H. Parkes “A Macroeconomic Understanding for use in Business” Day 7 卜安吉

  2. P P1 AD2 AD1 Y Y1 Y2 0 Why the ADCurve Might Shift Any event that changes C, I, G, or NX– except a change in P – will shift the AD curve. Example:A stock market boom makes households feel wealthier, C rises, the AD curve shifts right. Principles of Macroeconomics, Day 7

  3. Why the ADCurve Might Shift • Changes in C • Stock market boom/crash • Preferences re: consumption/saving tradeoff • Tax hikes/cuts • Changes in I • Firms buy new computers, equipment, factories • Expectations, optimism/pessimism • Interest rates, monetary policy • Investment Tax Credit or other tax incentives Principles of Macroeconomics, Day 7

  4. Why the ADCurve Might Shift • Changes in G • Federal spending, e.g. defense • State & local spending, e.g. roads, schools • Changes in NX • Booms/recessions in countries that buy our exports. • Appreciation/depreciation resulting from international speculation in foreign exchange market Principles of Macroeconomics, Day 7

  5. Why the AD Curve Might Shift • Changes in the Price Level, but HOW? • The REAL Money Balances, otherwise known as • the Money Market Principles of Macroeconomics, Day 7

More Related