Lesson Plan
Measuring the Economy - Introduction to AD &
AS
- I. Definitions
- - what is Aggregate Demand?
- - what is Aggregate Supply?
- II. Aggregate Demand (AD)
- - why is AD downward sloping?
- - wealth effect
- - foreign sector substitution effect
- - interest rate effect
- - what causes AD to shift?
- - consumption (C)
- - Investment (I)
- - Government (G)
- - Net Exports (Exports - Imports)
- III. Aggregate Supply (AS)
- - why is AS upward sloping?
- - lagging input prices
- - money illusion
- - what causes AS to shift?
- - resource costs
- - technology
- - government influences on labor/leisure choices
- IV. AD & AS Equilibrium
- - equilibrium defined (note: we will discuss the details of how
one gets to equilibrium later in the
course.
- - Demand pull inflation
- - Cost push inflation
- - economic growth
- - recession