Menu_26_June_06 - c. Case 3: Full employment 2. Long run:...

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TODAY’S MENU: Monday 26 June 2006 I. BUSINESS A. Practice Problems 1. Chapter 25: 1-13; 15 a. Best to do #s 5 and 15 with Chapter 19 2. Chapter 27: ALL II. SUBSTANCE A. Aggregate Supply 1. Short run (SRAS) vs. Long run (LRAS) a. Determinant of quantity of real GDP supplied i. Short run ii. Long run b. Determinants of SRAS i. Labor costs (wage push) (-) ii. Other input costs (supply shocks) (-) iii. Productivity (+) iv. Expected future aggregate price level (-) B. Equilibrium 1. Short run: AD = SRAS a. Case 1: Recession b. Case 2: Expansion
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Unformatted text preview: c. Case 3: Full employment 2. Long run: AD = SRAS = LRAS 3. From short run to long run a. Self-Correcting Mechanism (SCM): A labor market story i. Activist (i.e., Keynesian) ii. Non-activist (i.e., Monetarist) C. Aggregate Supply and Demand: Examples 1. Twelve questions to answer in each scenario D. Inflation: Introductory comments 1. Definitions 2. Friedmans dictum 3. Activist response III: NEXT TIME A. Continue Chapter 27: Money and Inflation...
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This note was uploaded on 07/31/2008 for the course ECON 2035 taught by Professor Stahl during the Spring '08 term at LSU.

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