Economics 15

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  • Aggregate Demand and Supply
    • Aggregate Demand
      • Why the Aggregate Demand Curve Slopes Downward
        • Fall in prices
        • increase of goods demanded
        • Consumption, Investment and Net exports increase
      • Why the Aggregate Demand Curve Might Shift
        • Consumption changes
        • Investment changes
        • Government purchases change
        • More or less exports
    • Aggregate Supply
      • Short Run
        • Sloping upwards
          • Normal wages are slow to adjust e.g. long term contracts
          • Menu costs make some firms reluctant to increase prices frequently
          • Some suppliers temporarily misread the reason for their price level changes
      • Long Run
        • Quantity suppplied depends on supply of factors of production
        • Shifts?
          • More or less flexible labour markets
          • Changes in capital stock
          • State of natural resources
          • Changes in technical knowledge


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