Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Aggregate supply and the AS curve
The AS curve is the aggregate supply as a function of P. It is horizontal when thesupply is low and upward sloping when the supply is high.
From the relationship between L and P we can derive the relationship between YS and P as YS is concluded by L by the production function (the higher L, the higher the).
Figure: The relationship between YS and P
Between points A and B prices are constant and firms produce an amount exactly equal to aggregate demand. Here reversed Say's Law and IS-LM model apply. In this interval, AS-AD model is redundant. Between points B and C we have a positive relation between P and YS. Neither reversed Say's Law nor IS-LM model apply.
It is, though, unreasonable to believe that there would be a 'sharp edge' in the relationship between L and P and between YS and P in real economy. Schedules are drawn this way to simplify the explanation. A more reasonable assumption would be that relationships are smooth curves.
Figure: More realistic relationships between L and P and between YS and P
how to calculate consumption from saving and tax
when supply of money increase what happen r,y.I.c
Joe has preferences over pizza (p) and beer (b) given by U = pb. The marginal utilities are MU p = b and MU b = p, and Joe's income is I = 60. 1. Find Joe's optimal consumptio
Determine Why banks raise their interest rates A way to explain why banks raise their interest rates is as follows. With higher overnight interest rates, it is more expensive fo
The short-run supply of a certain crop is perfectly inelastic, because it has already been harvested and no more of it can be grown until the next growing season. In order to raise
What are the Four different measures of GDP Using circular flow model we see that there are 4 equivalent techniques of measuring GDP: Using the definition: market value
Suppose there is a simultaneous increase in the demand for diamonds and increase in the supply of diamonds. Which of the following will occur as a result of these simultaneous even
Could you explain the "interest rate effect" in terms of the slope of a curve?
Illustrate the overview and importance of macroeconomics? After familiar with this illustration, able to know: a. An overview of macroeconomics is the study about the econom
Q. Describe classical model of macroeconomics? Though we use the term ‘the classical model' as if there were just one classical model, this isn't quite true. For all the models
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd