module economic growth in macroeconomic models krugman's macroeconomics for ap* 40 margaret ray...
DESCRIPTION
Long-run Economic Growth and the Production Possibilities Curve K’K C’ C Watch the slide animation. 1.What do points A, C and K represent? 2.What do points B, C’ and K’ represent? 3.What would have caused the shift to PPC’? LR growth is a shift outward of the PPC. SR fluctuation is a movement along PPC.TRANSCRIPT
ModuleEconomic Growth inMacroeconomic Models
KRUGMAN'SMACROECONOMICS for AP*
40
Margaret Ray and David Anderson
What you will learnWhat you will learnin thisin this ModuleModule::
• How long-run economic growth is represented in macroeconomic models
• How to model the effects of economic growth policies
Long-run Economic Growth and Long-run Economic Growth and the Production Possibilities Curvethe Production Possibilities Curve
K’K
C’
C
Watch the slide animation.1.What do points A, C and K represent?2.What do points B, C’ and K’ represent?3.What would have caused the shift to PPC’?
LR growth is a shift outward of the PPC.SR fluctuation is a movement along PPC.
Long-run Economic Growth and the Long-run Economic Growth and the Aggregate Demand-Aggregate Supply ModelAggregate Demand-Aggregate Supply Model
Watch the slide animation. 1. What would shift LRAS to LRAS’?
Distinguishing Between Distinguishing Between Long-run Growth and Long-run Growth and Short-run FluctuationsShort-run Fluctuations
Watch the slide animation. Answer the following questions.1.What part of the business cycle are we in? How does the graph show this?2.What happens to P and Y as we move towards Yf?3.Where do P and Yf end up?
4.What part of the business cycle are we in? How does the graph show this?5.What happens to P and Y as we move towards Yf?6.Where do P and Yf end up?
Distinguishing Between Long-run Distinguishing Between Long-run Growth and Short-run FluctuationsGrowth and Short-run Fluctuations