macro - Economics HL Notes Graeme...

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Unformatted text preview: Economics HL Notes Graeme (graemestanding@hotmail.com) Stephanie (saint_steph_@hotmail.com) [ 1 ] Section 3: Macroeconomics Contents Measuring national income ........................................................................................................................... 3 Circular flow of income .............................................................................................................................. 3 Methods of measurement income, expenditure and output .................................................................... 3 Distinctions ................................................................................................................................................ 4 Introduction to development ......................................................................................................................... 5 Definitions of Economic Growth and Economic Development .................................................................... 5 Limitations of Using GDP as a Measure to Compare Welfare between Countries ....................................... 5 Allowance for differences in purchasing power when comparing welfare between countries .................... 5 Alternative methods of measurement of development .............................................................................. 6 Problems of Measuring Development ........................................................................................................ 7 Aggregate Demand ........................................................................................................................................ 7 Aggregate Supply ........................................................................................................................................... 7 Short-run aggregate supply (SRAS) ............................................................................................................. 8 Long-run aggregate supply (LRAS) .............................................................................................................. 8 Equilibrium .................................................................................................................................................... 9 Inflationary gap & Deflationary Gap ............................................................................................................. 11 Diagram illustrating trade/business cycle ..................................................................................................... 11 Shifts in the aggregate demand curve/demand-side policies ........................................................................ 13 Shifts in the aggregate supply curve / supply-side policies ........................................................................... 14 Government Demand Side Policies .............................................................................................................. 16 Fiscal Policy.............................................................................................................................................. 16 Fiscal Policy....
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This note was uploaded on 02/12/2010 for the course ECON 201 taught by Professor Smith during the Spring '10 term at Whittier.

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macro - Economics HL Notes Graeme...

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