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AP Macro Aggregate Supply
AP Macro Aggregate Supply
Review
1. Define Aggregate. 2. Define Aggregate Demand. 3. Explain and give an example of the Real Balances Effect. 4. Explain and give an example of the Foreign Trade Effect. 5. Explain and give an example of the Interest-Rate effect. 6. Identify the Shifters of AD. 7. Give examples for each shifter. 8. Name 10 famous actresses.
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Supply
Aggregate Supply
With higher profits, the firm has the incentive to increase production.
If REAL profit doesnt change the firm has no incentive to increase output.
LRAS
QY
GDPR
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We also assume that in the long run the economy will be producing at full employment.
I. R. A. P.
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4. Change in Productivity
Technology (Computer virus that destroy half the computers) (The advent of a teleportation machine)
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