About This Chapter
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- Students who have fallen behind in understanding the Keynesian model or working with the classical model of the economy
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- Students who need an efficient way to learn about aggregate demand and supply
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- Refer to the video transcripts to reinforce your learning.
- Test your understanding of each lesson with short quizzes.
- Verify you're ready by completing the Aggregate Demand and Supply chapter exam.
Why it works:
- Study Efficiently: Skip what you know, review what you don't.
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Students will review:
This chapter helps students review the concepts in an Aggregate Demand and Supply unit of a standard college-level principles of macroeconomics course. Topics covered include:
- Supply and demand curves
- Aggregate supply and aggregate demand
- Marginal propensity to consume
- Aggregate supply in the economy
- Sticky wages and prices
1. The Keynesian Model and the Classical Model of the Economy
Economists use two basic models to describe economic growth. In this lesson, you'll find out more about each one of these models using real-world examples. So buckle up your seatbelts!
2. Supply and Demand Curves in the Classical Model and Keynesian Model
See how economists illustrate aggregate supply and aggregate demand in the long-term and short-term using the Classical and Keynesian models. This lesson emphasizes the differences in the shape of the aggregate supply curve using these two models.
3. Aggregate Supply and Aggregate Demand (AS-AD) Model
Supply and demand models are useful for examining the behavior of one good or market, but what about looking at a whole economy? Luckily, the aggregate supply and aggregate demand model lets us do just that.
4. Understanding Shifts in Labor Supply and Labor Demand
Find out what the labor supply is and what causes it to change or shift. Learn about labor demand and what causes firms and markets to increase or decrease their demand for labor.
5. Marginal Propensity to Consume: Definition and Formula of the MPC
MPC or MPS, what category is higher when you have extra money? In this lesson, learn about the marginal propensity to consume, one of the most important assumptions underlying fiscal and monetary policy.
6. Government Spending, GDP, and Crowding Out Private Investment
When the government spends more than it earns, it has to borrow money, which has repercussions throughout the economy. In this lesson, learn how government spending can crowd out private investment in the market for loanable funds.
7. Aggregate Supply in the Economy: Definition and Determinants
Learn about one of the fundamental components of economics. Find out what aggregate supply is and seven of the most common areas that influence it in today's economy.
8. Aggregate Supply in the Short Run
Learn about aggregate supply in the short run (SRAS) and what that really means. Find out how the overall price of goods affects quantity supplied in the short run and other key determinants that can increase and decrease aggregate supply in this time period.
9. Sticky Wages and Prices: Effect on Equilibrium
With the help of real-world examples, this lesson explains Keynes' important observation that wages and prices often don't adjust quickly to changes in economic conditions
10. Favorable Supply Shocks & Unfavorable Supply Shocks
In this lesson you'll learn the definitions, causes and effects of the two types of supply shocks in the economy by looking at a fictitious economy as an example.
11. The Market Demand Curve: Definition, Equation & Examples
What is the market demand curve, and how is it derived? This lesson will explain the concept of a market demand curve and show you how one would go about creating the curve.
12. Nominal GDP: Definition & Formula
A country's GDP is one of the most important indicators of its economic strength. In this lesson, you'll learn about nominal GDP and how to calculate it. You'll also have a chance to reinforce your knowledge with a short quiz.
13. The Cash Conversion Cycle: Definition, Formula & Example
This lesson will introduce you to the cash conversion cycle. it will be defined and a formula for its calculation is presented and explained. Finally a full illustration of the calculations is presented.
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Other chapters within the Introduction to Macroeconomics: Help and Review course
- The Production Possibilities Curve: Help & Review
- Comparative Advantage, Specialization and Exchange: Help and Review
- Demand, Supply and Market Equilibrium: Help and Review
- Measuring the Economy: Help and Review
- Inflation Measurement and Adjustment: Help and Review
- Understanding Unemployment: Help and Review
- Macroeconomic Equilibrium: Help and Review
- Inflation and Unemployment: Help and Review
- Economic Growth and Productivity: Help and Review
- Money, Banking, and Financial Markets: Help and Review
- Central Bank and the Money Supply: Help and Review
- Fiscal and Monetary Policies: Help and Review
- Foreign Exchange and the Balance of Payments: Help and Review
- Inflows, Outflows, and Restrictions: Help and Review
- Government & the Economy: Help and Review
- The U.S. Economic System