Macroeconomic Simple Note Chapter 3 - Aggregate Demand and Supply

 

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Chapter 3
Aggregate Demand 总需求	refers to the total demand of the final goods and services by the consumer, business, government, and others in a certain period, time, and economic system. 指在一定时期，时间和经济体系中，消费者，企业，政府等对最终商品和服务的总需求。
Components of Aggregate Demand	Household sector (Consumption / C) Business sector (investment / I) Government sector (government spending / G) Foreign sector (net exports, NX)
The formula of Aggregate demand	AD=C+ I+ G+ Nx (E-1) AD=consumption + investment + government spending + (total export-total import)
Factor Influence AD curve	Slopes downward (output decrease, price level increase)  Interest rate Real balance effect (wealth effect) Higher price level, Foreign purchasing effect
Factors affect aggregate demand	Cause AD increase The decrease in tax. Increase in government spending. Increase in the money supply. Cause AD decrease Increase in tax. The decrease in government spending. The decrease in the money supply
Aggregate supply总供给	The aggregate supply curve shows the combination of price and output, that is, the total amount of products that firms in the whole society are willing to supply at a certain price level. 总供给曲线显示了价格和产出之间的关系，也就是整个经济社会中的企业愿意以一定价格水平提供的产品总量。
Types of Aggregate supply	The long-run aggregate supply curve In the long-term, economic employment levels do not change with price changes, but with full employment. The curve is usually a straight vertical line. Short-run aggregate supply curve In the short run, aggregate supply move with the price level in the same direction usually slopes upward to the right.
Factors influence AS curve	Production method Technology Price Production technique Labor cost
Factors cause SARS shift	A change in wages A change in tax on business profit A change in the cost of productivity A change in the cost of raw material Supply shock
Factors cause LARS shift	Investment on new technology Migration and population growth Education and training Competition of product and labor market
FINISH

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