Transcript Slide 1

Creating PowerPoint
Lectures w/ Animation
presented by Eric Chiang
By Educators.
For Students.
Benefits of Animation:
1) Allows one to break down
explanations, graphs, and models
into steps
2) Replicates the viewing of the
chalkboard in class
3) Allows students to review
challenging concepts at home
4) Each slide serves as a template for
the next
CoreMacro
Chapters 9 – 10
Aggregate Demand
and Supply /
Fiscal Policy
1. Promote Economic Growth
2. Maintain Full Employment
3. Achieve Price Stability
Three Well Functioning Markets
Capital Market
(interest rates)
Product Market
(prices)
Labor Market
(wages)
Economy
stays on the
long-run
trend in the
Classical
Growth
Model
Economy experiences business
cycles in modern macro models
AD/AS model
shows how
aggregate output
is affected by the
price level
AD/AS Model: Macro Equilibrium
Price
Level
(P)
LRAS
SRAS
Short-runmacro
macroequilibrium
equilibrium
Long-run
AD
Output
How does the
AD/AS model
explain the
business cycle?
Negative Demand Shock
LRAS
Price
Level
(P)
Short-run
Eq.
SRAS
Long-run macro equilibrium
AD
AD2
Output Gap
Output
Option 1: Letting the Market Correct Itself over Time
LRAS
Price
Level
(P)
SRAS
SRAS2
Short-run
Eq.
Long-run Eq.
AD
AD2
Output Gap
Output
Option 2: Using Expansionary Fiscal Policy to Shift AD
LRAS
Price
Level
(P)
Short-run
Eq.
SRAS
Long-run macro equilibrium
AD
AD2
Output Gap
Output
Positive Demand Shock: Leads to Demand-Pull Inflation
Price
Level
(P)
LRAS
SRAS
Short-run equilibrium
Long-run macro equilibrium
AD2
AD
Output Gap
Output
Option 1: Letting the Market Correct Itself over Time
Price
Level
(P)
LRAS
SRAS2
SRAS
Short-run equilibrium
AD2
AD
Output
Option 2: Using Contractionary Fiscal Policy to Reduce Inflation
Price
Level
(P)
LRAS
SRAS
Short-run equilibrium
Long-run macro equilibrium
AD2
AD
Output Gap
Output
Negative Supply Shock: Leads to Cost-Push Inflation
Price
Level
(P)
Short-run equilibrium
LRAS
SRAS2
SRAS
Long-run macro equilibrium
AD
Output Gap
Output
CoreMicro
Chapters 8 – 9
Maximizing Profit in
Competition
and Monopoly:
The 5 Step Approach
In a perfectly competitive market…
P
1.
2.
3.
4.
5.
Find MR = MC
Find optimal Q
Find optimal P
Find ATC
Find Profit
MC
ATC
$10
$7
0
P = MR
Profit
20
Q
In a monopoly or monopolistically competitive market…
P
1.
2.
3.
4.
5.
Find MR = MC
Find optimal Q
Find optimal P
Find ATC
Find Profit
MC
ATC
$13
Profit
$6
MR
0
15
D
Q
i>clicker
Enhance your grade
with active participation
Macro Word of the Day
“Multiplier Effect”
a
When word-of-mouth causes
products to become popular
b
When a dollar spent generates
many more dollars of spending
c
When you earn interest on
past interest earnings
d
When you pay more in finance
charges than you borrowed
Macro Word of the Day
“Multiplier Effect”
a
When word-of-mouth causes
products to become popular
b
When a dollar spent generates
many more dollars of spending
c
When you earn interest on
past interest earnings
d
When you pay more in finance
charges than you borrowed
QUESTION 1
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Famous Economist
a
Ben Bernanke
b
Timothy Geithner
c
Austan Goolsbee
d
Alan Greenspan
Famous Building or Landmark
a
New York Stock Exchange
b
Bureau of Labor Statistics
c
U.S. Treasury
d
Federal Reserve Bank
How long did our most recent
recession officially last?
a
12 months
b
18 months
c
24 months
d
This is a trick question:
the recession hasn’t ended
Is a person who lost a high paying
job and temporarily working at a
supermarket unemployed?
a
Yes, s/he is unemployed
b
No, s/he is employed
How much are you
willing to pay for one slice
of pizza right now?
a
$5.00
b
$3.50
c
$2.00
d
$1.00
e
$0.00
How much are you
willing to pay for one slice
of pizza right now?
a
$5.00
b
$3.50
c
$2.00
d
$1.00
e
QUESTION 5
$0.00
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4%
6%
39%
33%
18%
Suppose you do not work and have no
income. Besides basic necessities, how
much do you need per month to get by?
a
Less than $200
b
$400
c
$600
d
$800
e
$1,000 or more
Now suppose your rich aunt gives you
$1,000/month to spend. How much of
this new money would you spend?
a
Less than $200
b
$400
c
$600
d
$800
e
$1,000 (all of it)
Aggregate Expenditures Model
Aggregate
Expenditures
(AE)
45º line: Y = AE
C
DEBT
SAVINGS
Income (Y)
i>clicker
Enhance your grade
with active participation
Homer is fired from the power
plant and goes back to school to
earn a college degree. Homer is:
a
still part of the labor force
b
not part of the labor force
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A business cycle recovery
that doesn’t reach its long-term
trend can lead to:
a
hyperinflation
b
lower cyclical
unemployment
c
its natural unemployment
rate
d
a double dip recession
If the price index is 200, how
much did a $4 Big Mac (today)
cost in the base year?
a
$0.40
b
$1.00
c
$2.00
d
$8.00
By Educators. For Students.
My Contact Information:
By
Educators.
For Students.
E-mail:
[email protected]
Phone: 561-297-2947
Web: ProfessorChiang.com
Twitter: @ProfessorChiang
Facebook.com/CoreEconomics