RIR

DLF

RIR

LF

SLFPSLF

DLF

RIR

LF

PSLFSLF

MC

MB

PPFGood x

Good yLS

LD

PFRGDP

RWR

Labor

MS

MD

NIR

QM

AD

PL

RGDP

AS

S

D

P

Q

LS

LD

RWR

Labor

DLF

RIR

LF

SLFSurplus Market effecting Price Floor

shortage, Market effecting Price Ceiling

Goods & Services Labor Loanable Funds

Deficit DurpluD

_____________Market _____________Market

Graph ChapterPPF 3S/D 4PF 8LS/LD 9

Graph ChapterSLF/DLF 10MS/MD 12AS/AD 13

PPF

Goodx PF

RGDP

GOODy

Labor

Attainable, inefficient Attainable

Unattainable

Unattainable

Attainable, efficient

D

S1P

Q

S2

D

S2P

Q

S1

CURVE SHIFTS:price of good/service (graphed) = qty Sprice of substitute in production = Sprice of complement in production = Sresource price or other input price = SFuture Prices expected to = Snumber of sellers = Sproductivity = S

D1

D2

SP

Q

D2

D1

SP

QCURVE SHIFTS:price of good/service (graphed) = qty D price of substitute in consumption = D price of complement in consumption = DIncome (inferior good) = DIncome (normal good) = DFuture Prices expected to = DFuture Income expected to = Dnumber of buyers = Din preferences = D (item A) and D (item B)

LD

LS1RWR

LABOR

LS2

LD

LS2RWR

LABOR

LS1

CURVE SHIFTS: LS = income taxes LS = unemployment benefits LS = population

LD1

LD2

LSRWR

LABOR

LD2

LD1

LSRWR

LABOR

LD = Productivity

DLF

SLF1RIR

LF

SLF2

DLF

SLF2RIR

LF

SLF1

CURVE SHIFTS: SLF = Disp. income SLF = Wealth SLF = Exp. Future income

DLF1

DLF2

SLFRIR

LF

DLF2

DLF1

SLFRIR

LF

CURVE SHIFTS: DLF = Exp. profit

Bus. Cycle expansionTechnology, successful new products Population

MD

MS2MS1NIR

QMMD

MS1MS2NIR

QM

CURVE SHIFTS: MS = RRR MS = Disc rate MS = Selling Securities

MS = banks make smaller or less loans MS = people deposit less money

LONG RUN:Fed makes Open Mkt purchase Qty $ NIR RIR borrowing/investing (spending habits change) change in production and prices Thus, Shortrun NIR adjusts, Longrun PL adjusts

Short run qty$ = IR Long run qty$ = price levelV = inflation rate

MD1

MD2

MSNIR

QM

MD2

MD1

MSNIR

QM

CURVE SHIFTS: MD = PL MD = RGDPFinancial Technology

MD = ATMs MD = Credit Cards

AD

AS1PL

RGDP

AS2

AD

AS2PL

RGDP

AS1

CURVE SHIFTS: AS = Pot. GDP AS = MWR AS = Money price of other resource

LONG RUN:price level MD NIR RIR spending qty RGDP demanded ADprice level RWR

AD1

AD2

ASPL

RGDP

AD2

AD1

ASPL

RGDPCURVE SHIFTS: AD = Exp. Future income, inflation, profits AD = taxes AD = Transfer pmts/Govt. Expenditure AD = qty money AD = Interest rate AD = Foreign Income AD = Global economy (expands) AD = Exchange rate

exchange rate (from 100yen to 125 yen for $1) = cheaper foreign goods (12,500yen goes from $125 to $100) = imports (we buy more of their goods) = AD (and less of ours)

LD

LSWAGE

LABOR

D

SP

Q

LABOR SURPLUS SURPLUS

LD

LSWAGE

LABOR

D

SP

Q

LABOR SHORTAGE SHORTAGE