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Unformatted text preview: -expecting to fall—want to sell more today B. Equilibrium 1. Short run: AD = SRAS a. Case 1: Recession-no job opening available -down side of business cycle b. Case 2: Expansion c. Case 3: Full employment-can only survive in long run 2. Long run: AD = SRAS = LRAS 3. From short run to long run a. Self-Correcting Mechanism (SCM): A labor market story-self: talking about marco economy on its own without policy makers C. Aggregate Supply and Demand: Examples 1. Six questions to answer in each scenario-everything else held constant, 6 questions to answer –Must answer -change in GDP, change in unemployment rate, what is change in AGG price level 2. Examples III. NEXT TIME A. Third exam over Chapters 24, 25, 27...
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This note was uploaded on 02/14/2012 for the course ECON 2030 taught by Professor Bong during the Fall '07 term at LSU.
- Fall '07