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Lec04handout - Aggregate Demand and Aggregate Supply...

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Aggregate Demand and Aggregate Supply Slide #04 Intro Macro 1
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Aggregate Demand & Aggregate Supply Economic activity Fluctuates from year to year Economic fluctuation Business cycle Recession: Economic contraction Period of declining real incomes and rising unemployment Depression: Severe recession Intro Macro 2
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3 Key Facts About Economic Fluctuations 1. Economic fluctuations are irregular and unpredictable 2. Most macroeconomic quantities fluctuate together 3. As output falls, unemployment rises Intro Macro 3
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