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    The document contains figures illustrating the relationship between aggregate expenditure (AE), aggregate demand (AD), the price level, and real GDP in the short run. It shows how: 1) A shift in AD leads to a change in equilibrium real GDP and the price level. 2) The short-run aggregate supply (SARS) curve depicts the short-run relationship between the price level and real GDP. 3) When the price level varies, a change in AD can lead to multiple equilibria with different price levels and real GDP levels.

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    LIPSEY_FIGS23Visit Us @ Management.umakant.info

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    The document contains figures illustrating the relationship between aggregate expenditure (AE), aggregate demand (AD), the price level, and real GDP in the short run. It shows how: 1) A shift in AD leads to a change in equilibrium real GDP and the price level. 2) The short-run aggregate supply (SARS) curve depicts the short-run relationship between the price level and real GDP. 3) When the price level varies, a change in AD can lead to multiple equilibria with different price levels and real GDP levels.

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    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
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    8 views14 pages

    LIPSEY - FIGS23Visit Us at Management - Umakant.info

    Uploaded by

    welcome2jungle
    The document contains figures illustrating the relationship between aggregate expenditure (AE), aggregate demand (AD), the price level, and real GDP in the short run. It shows how: 1) A shift in AD leads to a change in equilibrium real GDP and the price level. 2) The short-run aggregate supply (SARS) curve depicts the short-run relationship between the price level and real GDP. 3) When the price level varies, a change in AD can lead to multiple equilibria with different price levels and real GDP levels.

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    of 14

    CHAPTER 23:

    GDP and the Price Level in the Short Run

    FIGURES
    Figure 23.1 Aggregate Expenditure and the Price Level

    AE = Y
    Desired Expenditure

    45o
    0
    Real National Income [GDP]
    Figure 23.1 Aggregate Expenditure and the Price Level

    AE = Y
    AE0
    Desired Expenditure

    E0

    45o
    0 Y0
    Real National Income [GDP]
    Figure 23.1 Aggregate Expenditure and the Price Level

    AE = Y
    AE0

    AE1
    Desired Expenditure

    E0

    E1

    45o
    0 Y1 Y0
    Real National Income [GDP]
    Figure 23.2 The AD Curve and the AE Curve
    AE = Y AE0
    E0
    Desired Expenditure AE1

    E1 AE2

    E2

    45o
    0 Y2 Y1 Y0 Real National Income [GDP]
    [i]. Aggregate expenditure

    E2
    Price Level

    P2
    E1
    E0
    P1

    P0
    AD

    Y2 Y1 Y0 Real National Income (GDP)


    0
    [ii]. Aggregate Demand
    Figure 23.4The Simple Multiplier and Shifts in the AD Curve
    AE = Y
    E1 AE1

    Desired Expenditure
    AE0

    E0

    A

    [i]. Aggregate Expenditure 45o

    0 Y0 Y1 Real GDP
    Price Level

    E0 E1

    P0

    Y AD1
    [i]. Aggregate Demand AD0

    0 Y0 Y1 Real GDP
    Figure 23.5 A Short-run Aggregate Supply Curve

    SARS

    Y
    Real GDP
    Figure 23.5 A Short-run Aggregate Supply Curve

    SARS

    P0

    Y0
    Real GDP
    Figure 23.5 A Short-run Aggregate Supply Curve

    SARS

    P1

    P0

    Y0 Y1
    Real GDP
    Figure 23.7 Macroeconomic Equilibrium

    AD
    SARS
    Price Level

    E0
    P0

    0 Y0
    Real GDP
    Figure 23.7 Macroeconomic Equilibrium

    AD
    SARS
    Price Level

    E0
    P0

    P1

    0 Y1 Y0 Y2
    Real GDP
    Figure 23.9 The AE Curve and the Multiplier When the Price Level Varies
    AE = Y

    Desired Expenditure
    AE0

    E0

    45o

    0 Y0
    Real GDP
    [i]. Aggregate expenditure

    SARS
    Price Level

    P1 E0
    P0

    AD0

    Y0
    Real GDP
    [i]. Aggregate demand
    Figure 23.9 The AE Curve and the Multiplier When the Price Level Varies
    AE = Y
    E’1 AE’1

    Desired Expenditure
    AE0

    A
    E0
    1

    45o

    0 Y0 Y’1
    Real GDP
    [i]. Aggregate expenditure

    SARS
    Price Level

    P1 E0
    E’1
    P0
    1

    AD0
    Y0 Y1 Y’1 Real GDP
    [i]. Aggregate demand
    Figure 23.9 The AE Curve and the Multiplier When the Price Level Varies
    AE = Y
    E’1 AE’1

    Desired Expenditure
    AE1

    2 E1 AE0

    A
    E0
    1

    Y
    45
    o

    0 Y0 Y1 Y’1
    Real GDP
    [i]. Aggregate expenditure

    SARS
    Price Level

    E1
    P1 2
    E0
    E’1
    P0
    1 AD1

    AD0
    Y0 Y1 Y’1 Real GDP
    [i]. Aggregate demand

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