ec-5 - Chapter 10 Aggregate Supply & Demand in the Long...

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Aggregate Supply & Demand in the Long Run Chapter 10
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Chapter Outline Long-Run Aggregate Supply Curve Aggregate Demand Curve Shifts in the Aggregate Demand Curve Long-Run Equilibrium: Prices, Output & Employment Changes to Prices, Output & Employment Causes of Inflation
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Long-Run Aggregate Supply Curve Long-Run Aggregate Supply Curve An amount of real GDP (at full employment) People have full information and have adjusted The price level is fixed (just at the setup) Technology has not changed All resources are fully employed The economy is on its production possibilities curve
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Long-Run Aggregate Supply Curve
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Long-Run Aggregate Supply Curve LRAS is vertical Input prices fully adjust to changes in output prices Suppliers have no incentive to increase output Unemployment is at the natural rate (full employment)
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Economic Growth (5 things) Growth is shown by outward shifts of either the production possibilities curve or the LRAS curve caused by:
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ec-5 - Chapter 10 Aggregate Supply & Demand in the Long...

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