Shifts in Aggregate Demand

Copyright 2011  Pearson Canada Inc. 24 - 1 Chapter 24 Aggregate Demand and Supply Analysis Copyright 2011  Pearson Canada Inc. 24 - 2 Aggregate Demand • Aggregate Demand - The relationship between the quantity of aggregate output demanded and the price level when all other variables are held constant • Based on the quantity theory of money – Determined solely by the quantity of money • Based on the components parts – Consumption, investment, government spending and net exports Y AD = C + I + G + NX Copyright 2011  Pearson Canada Inc. 24 - 3 Quantity Theory of Money Approach to Aggregate Demand M =quantity of money P= price level Y= aggregate real output (real income) P x Y = total nominal spending on goods and services V = the average number of time per year that a dollar is spent Multiplying both sides by M we derive the equation of exchange which relates money supply to aggregate spending M x V = P x Y Changes in aggregate spending are determined primarily by changes in the money supply M YxP V = Copyright 2011  Pearson Canada Inc. 24 - 4 Deriving the Aggregate Demand Curve • Changes in the price level induce changes in the aggregate output demanded and hence movement along the AD curve (points A, B, and C in Figure 24-1) • In the quantity theory, changes in the money supply are the primary source of changes in aggregate spending and thus shifts the AD curve. Copyright 2011  Pearson Canada Inc. 24 - 5 Aggregate Demand Curve Copyright 2011  Pearson Canada Inc. 24 - 6 Behaviour of Aggregate Demand’s Component Parts Y AD = C + I + G + NX The aggregate demand curve is downward sloping because P ↓ → M/P ↑ →i ↓ → I ↑ → Y AD ↑ and P ↓ → M/P ↑ →i ↓ → E ↓ → Y AD ↑ Copyright 2011  Pearson Canada Inc. 24 - 7 Factors that Shift Aggregate Demand • An increase in the money supply shifts AD to the right because it lowers interest rates and stimulates investment spending • An increase in spending from any of the components C, I, G, NX, will also shift AD to the right Copyright 2011  Pearson Canada Inc. 24 - 8 Factors That Shift the Aggregate Demand Curve I Copyright 2011  Pearson Canada Inc. 24 - 9 Factors That Shift the Aggregate Demand Curve II Copyright 2011  Pearson Canada Inc. 24 - 10 Aggregate Supply • Long-run aggregate supply curve (LRAS) – Determined by amount of capital and labor and the available technology – Vertical at the natural rate of output generated by the natural rate of unemployment • Short-run aggregate supply curve (SRAS) – Wages and prices are sticky – Generates an upward sloping SRAS as firms attempt to take advantage of short-run profitability when price level rises [...]... Run Aggregate Supply Short Run Aggregate Supply Factors that Shift Short Run Aggregate Supply I • Costs of production – – – – Tightness of the labor market Expected price level Wage push Change in production costs unrelated to wages (supply shocks) Factors that Shift Short Run Aggregate Supply II Equilibrium of AS and AD in the Short Run Equilibrium of AS and AD in the Long Run I Equilibrium of AS and. .. result of past high unemployment – Natural rate of unemployment shifts upward and natural rate of output falls below full employment – Expansionary policy needed to shift aggregate demand Shifts in Aggregate Demand Shifts in Aggregate Demand By: OpenStaxCollege As mentioned previously, the components of aggregate demand are consumption spending (C), investment spending (I), government spending (G), and spending on exports (X) minus imports (M) (Read the following Clear It Up feature for explanation of why imports are subtracted from exports and what this means for aggregate demand.) A shift of the AD curve to the right means that at least one of these components increased so that a greater amount of total spending would occur at every price level A shift of the AD curve to the left means that at least one of these components decreased so that a lesser amount of total spending would occur at every price level The Keynesian Perspective will discuss the components of aggregate demand and the factors that affect them Here, the discussion will sketch two broad categories that could cause AD curves to shift: changes in the behavior of consumers or firms and changes in government tax or spending policy Do imports diminish aggregate demand? We have seen that the formula for aggregate demand is AD = C + I + G + X – M, where M is the total value of exported goods Why is there a minus sign in front of imports? Does this mean that more imports will result in a lower level of aggregate demand? Actually, imports are already included in the formula in the form of consumption (C) When an American consumer buys a foreign product, it gets counted along with all other consumption Since the income generated does not go to American producers, but rather to producers in another country, it would be wrong to count this as part of domestic demand Therefore, imports added in consumption are subtracted back out in the M term of the equation Because of the way in which the demand equation is written, it is easy to make the mistake of thinking that imports are bad for the economy Just keep in mind that every negative number in the M term has a corresponding positive number in the C term, and they always cancel out 1/8 Shifts in Aggregate Demand How Changes by Consumers and Firms Can Affect AD When consumers feel more confident about the future of the economy, they tend to consume more If business confidence is high, then firms tend to spend more on investment, believing that the future payoff from that investment will be substantial Conversely, if consumer or business confidence drops, then consumption and investment spending decline The Conference Board, a business-funded research organization, carries out national surveys of consumers and executives to gauge their degree of optimism about the near-term future economy The Conference Board asks a number of questions about how consumers and business executives perceive the economy and then combines the answers into an overall measure of confidence, rather like creating an index number to represent the price level from a variety of individual prices For consumer confidence, the overall level of confidence in 1985 is used as a base year and set equal to 100, and confidence in every other year can be compared to that base year Measured on this scale, for example, consumer confidence rose from 100 in August 2006 to 111 in February 2007, but had plummeted to 56 by early 2010 Business confidence is measured on a scale from to 100, so that a score of 50 represents a neutral view, 100 would represent extreme confidence, and would represent an extreme lack of confidence Business confidence sank from 57 in the first quarter of 2006 to 44 in the third quarter of 2006 before rebounding to 53 in the first quarter of 2007 It sank as low as 35 in early 2009 before bouncing back to 58 by early 2010 Of course such survey measures are not precise They can, however, suggest when confidence is rising or falling, or when it is relatively high or low compared to the past Visit this website for more information from The Conference Board Because a rise in confidence is associated with higher consumption and investment demand, it will lead to an outward shift in the AD curve, and a move of the equilibrium, from E0 to E1, to a higher quantity of output and a higher price level, as shown in [link] (a) Consumer and business confidence often reflect macroeconomic realities; for example, confidence is usually high when the economy is growing briskly and low during 2/8 Shifts in Aggregate Demand a recession However, economic confidence can sometimes rise or fall for reasons that not have a close connection to the immediate economy, like a risk of war, election results, foreign policy events, or a pessimistic prediction about the future by a prominent public figure U.S presidents, for example, must be careful in their public pronouncements about the economy If they offer economic pessimism, they risk provoking a decline in confidence that reduces consumption and investment and shifts AD to the left, and in a self-fulfilling prophecy, contributes to causing the recession that the president warned ...Changes in acetylcholine receptor function induce shifts in muscle fiber type composition Tae-Eun Jin 1, *, Anton Wernig 2 and Veit Witzemann 1 1 Abt. Zellphysiologie, Max-Planck-Institut fu ¨ r Medizinische Forschung, Heidelberg, Germany 2 Institut fu ¨ r Physiologie, Universita ¨ t Bonn, Germany The impact of innervation on the establishment of spe- cific muscle fiber types during embryonic and postnatal development has been demonstrated in numerous stud- ies [1], and has been attributed to the specific neural impulse pattern [2] that can be mimicked partially by electrical stimulation [3,4]. Skeletal muscles adapt to specific functions and have, throughout development, the capacity to change their phenotype in response to altered functional demands. Their phenotypic profiles are affected not only by innervation ⁄ neuromuscular activity, but also by exercise training, mechanical load- ing ⁄ unloading, hormones, and aging, causing transi- tions from fast-to-slow or slow-to-fast fiber types. Muscle activity has also been shown to induce struc- tural and functional adaptations of the neuromuscular junction (NMJ), suggesting that muscle function, fiber type composition and plasticity of the NMJ may be linked [5]. In order to identify the contributions of postsynaptic signaling to adaptation of muscle func- tion, it is necessary to modulate activity specifically at endplate acetylcholine receptors (AChRs), leaving neuronal inputs unchanged and avoiding complex Keywords acetylcholine receptor; acetylcholine receptor e-subunit knockout mice; fast and slow muscle; fiber type; real-time PCR Correspondence V. Witzemann, Abt. Zellphysiologie, Max-Planck-Institut fu ¨ r Medizinische Forschung, Jahnstr. 29, D-69120 Heidelberg, Germany Fax: +49 6221 486459 Tel: +49 6221 486475 E-mail: witzeman@mpimf-heidelberg.mpg.de *Present address Center for Cell Signaling Research, Ewha Woman’s University, Seoul, South Korea (Received 9 January 2008, revised 12 February 2008, accepted 25 February 2008) doi:10.1111/j.1742-4658.2008.06359.x AChRe ) ⁄ ) mice lack e-subunits of the acetylcholine receptor and thus fail to express adult-type receptors. The expression of fetal-type receptors throughout postnatal life alters postsynaptic signal transduction and causes a fast-to-slow fiber type transition, both in slow-twitch soleus muscle and in fast-twitch extensor digitorum longus muscle. In comparison to wild- type muscle, the proportion of type 1 slow fibers is significantly increased (6%), whereas the proportion of fast fibers is reduced (in soleus, type 2A by 12%, and in extensor digitorum longus, type 2B ⁄ 2D by 10%). The increased levels of troponin I slow transcripts clearly support a fast-to-slow fiber type transition. Shifts of protein and transcript levels are not restricted to ‘myogenic’ genes but also affect ‘synaptogenic’ genes. Clear increases are observed for acetylcholine receptor a-subunits and the post- synaptically located utrophin. Although the fast-to-slow fiber type transi- tion appears to occur in a coordinated manner in both muscle types, muscle-specific differences are retained. Most prominently, the differential expression level of the synaptic regulator MuSK is significantly lower in extensor digitorum muscle than in soleus muscle. The results show a new quality in muscle plasticity, in that changes in the functional properties of endplate receptors modulate the contractile properties of skeletal muscles. Muscle thus represents a self-matching system that adjusts contractile prop- erties and synaptic function to variable functional demands. Abbreviations AChR, acetylcholine receptor; BS, blocking Sales 2.0 Exploring Paradigm Shifts in Web Technologies, Sales Performance, and Learning Sharon A. Vipond Ph.D. Peter T. Dunn Intrepid Learning Solutions Intrepid Learning Solutions Executive White Paper August 2008 Exploring the Paradigm Shift in Sales Performance, Technologies, and Learning This White Paper is Proprietary to Intrepid Learning Solutions How much do you know about Sales 2.0? If you are a sales representative, you are probably overwhelmed with constant business travel to and from client meetings and too concerned about making your quarterly revenue quotas to devote any time to understand the meaning of Sales 2.0 If you are a sales executive, you may be one of many who have a passing familiarity with the term but are simply too busy gathering sales metrics, setting quotas, and closing deals to spend any more time exploring the implications of Sales 2.0. 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The Bottom Line: What do you 133 CHAPTER OUTLINE CASE 1 Timex and the Electronic Revolution CASE 2 Eastman Kodak and Digital Photography Introduction New Developments Affecting Competitive Advantage New Technology New Distribution Channels Economic Shifts Changes in Related or Neighboring Industries Government Regulation Response Options Prospecting Defending Harvesting Generic Change Situations Magnitude of Threat Ability to Adjust Common Change Situations Uncertainty Impact of Environmental Development Ability to Adjust Ethical Dimension Risk Preference Return Preference Summary Exercises and Discussion Questions Shifts in Competitive Advantage: Responding to Environmental Change WHAT YOU WILL LEARN • How and why a firm’s competitive advantage can change over time • Some important sources or triggers of change • Strategies that firms can undertake to respond to change 134 PART 1 Building Competitive Advantage During the 1950s and 1960s, Timex became the largest manu- facturer of watches in the world. It experienced phenomenal success. By 1970, one of every two watches sold in the United States was a Timex product. The company was rapidly increas- ing its market share abroad. Yet, by the mid-1990s, the name most people associate with watches designed for the broad market in the United States tends to be Seiko, Citizen, Pulsar, Accutron, or Swatch, and not so much a Timex as in times past. What happened in the watch industry during the 1970s, both in the United States and abroad? Despite the company’s initially impressive record, Timex’s long-term competitive advantage was not assured. One devel- opment that arose with full force during the early 1980s in par- ticular threatened the company’s continued prosperity. Elec- tronic watches were beginning to appear on the market. While still expensive (more than $200 apiece in 1970 versus $20 to $30 for the typical Timex watch), electronic watches underwent rapid price declines throughout the late 1970s and early 1980s until they overwhelmed the marketplace for mechanical, pin- level watches. It was thus conceivable that they might someday become a threat to Timex’s bread-and-butter mechanical watch business. To appreciate the extent of the threat that electronic watches posed for Timex, one needs to examine the core parts that make a watch. A watch consists of four major components: a power source, a timing mechanism, a channel for communicating tim- ing pulses, and a readout device. These parts are listed in Exhibit 5-1. In a mechanical watch, a hand-wound spring (power source) drives a balance wheel (timing mechanism). These movements are transmitted by gears (communication channel) to the hands of the watch (readout device). In an elec- tronic watch, a battery (power source) activates a quartz crystal (timing mechanism). These electric pulses are transmitted by an integrated circuit (communication channel) to a digital display (readout device). The electronic watch uses different parts than those in mechanical watches. It also makes use of different materials (exotic substances like crystals and light-emitting diodes (LEDs) instead of metal springs and gears). Different core technologies are needed (sophisticated electronic design and crystal chemistry instead of metallurgy), along with differ- ent design skills (stepper motors and integrated circuits). Even different machinery is required (equipment for making batter- ies, quartz crystals, and integrated semiconductor-based circuits instead of metal-cutting lathes and drills). Producing electronic watches thus requires a completely alternative set of skills that compels a traditional watchmaker to learn an entirely new set of technologies, value-adding skills, and approaches to product commercialization and development. In each of the watch’s core parts, new technologies and man- ufacturing methods displaced Timex from the market. Innova- tions in quartz crystal chemistry and LED (light-emitting diode) technologies made Timex’s spring-based parts Chương 6 Tổng cầu (Aggregate Demand_AD) và Tổng cung (Aggregate Supply_AS) I. Biến động kinh tế ngắn hạn • Hoạt động kinh tế luôn biến động từ năm này sang năm khác. • Sản lượng hàng hoá và dịch vụ hầu như đều tăng qua các năm • Ví dụ, tăng trưởng kinh tế Mỹ trung bình trong vòng 50 năm qua là 3%, của Việt Nam trong vòng 20 năm là 6.8% • Trong một vài năm, sản lượng không tăng mà lại giảm • Biến động kinh tế diễn ra bất thường và không dự báo • Sự biến động của nền kinh tế được gọi là chu kỳ kinh doanh • Hầu hết các biến số kinh tế vĩ mô biến động đồng thời • Khi sản lượng giảm tỷ lệ thất nghiệp tăng lên Ba bằng chứng then chốt về biến động kinh tế Chu kỳ kinh doanh: là những biến động ngắn hạn của những hoạt động kinh tế tổng thể của một nớc Một chu kỳ kinh doanh: đỉnh chu kỳ 1. giai đoạn bùng nổ đáy chu kỳ 1. giai đoạn phục hồi 1. giai đoạn suy thoái 1. giai đoạn suy giảm Xu hớng GDP Thời gian đỉ nh đ á y Chu k kinh doanh Biến động kinh tế ngắn hạn Tỷ đô la Mỹ 1996 Real GDP (a) GDP thực tế (Real GDP) $10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1965 1970 1975 1980 1985 1990 1995 2000 Biến động kinh tế ngắn hạn (b) Chi đầu tư_Investment spending $1,800 1,600 1,400 1,200 1,000 800 600 400 200 1965 1970 1975 1980 1985 1990 1995 2000 Investment spending Tỷ đô la Mỹ 1996 Biến động kinh tế ngắn hạn % trong LLLĐ (c) Tỷ lệ thất nghiệp_Unemployment Rate 0 2 4 6 8 10 12 1965 1970 1975 1980 1985 1990 1995 2000 Unemployment rate Tốc độ tăng trưởng kinh tế hằng năm của Việt Nam 1956 - 2006 GDP thực tế -15.0 -10.0 -5.0 0.0 5.0 10.0 15.0 20.0 1 9 56 19 5 9 1 9 62 19 6 5 1 968 197 1 1 97 4 1 9 7 7 1 9 80 1 9 83 1 98 6 1 98 9 19 9 2 1 9 95 19 9 8 2 00 1 200 4 Tốc độ tăng (%) Tốc độ tăng trưởng kinh tế hằng năm của Việt Nam 1986 - 2006 GDP thực tế 0 2 4 6 8 10 12 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Tốc độ tăng (%) Ngắn hạn và dài hạn  Ngắn hạn: ➼ Giá cả không linh hoạt và/hoặc ➼ Thông tin hoàn hảo. ➼ K, L, công nghệ cố định và có thể không được sử dụng hết.  Dài hạn: ➼ Giá cả hoàn toàn linh hoạt. ➼ Thông tin hoàn hảo. [...]...II Mô hình Tổng cầu và tổng cung  Hai biến nội sinh  GDP thực tế: Y  Mức giá chung: P 1 Tổng cầu (Aggregate Demand)  Tổng cầu là mức sản lượng trong nước mà các tác nhân kinh tế sẵn sàng và có khả năng mua tại mỗi mức giá  D: Sẵn sàng và khả năng mua  A: mọi hàng hóa và dịch vụ sản xuất tại VN từ mọi người mua  Bốn thành tố của GDP (Y) đóng góp vào tổng cầu hàng hoá và dịch vụ Y = C +... xuất  A: mọi hàng hóa và dịch vụ của mọi doanh nghiệp sản xuất trên lãnh thổ VN Đường tổng cung ngắn hạn và dài hạn AS P ASLR C P2 A P1 P0 Y0 B Y* Y2 Y Đường tổng cung dài hạn P ASLR P P2 1.Giảm mức giá chung 0 2 không ảnh hưởng lượng hàng hoá và dịch vụ được cung trong dài hạn Sản lượng tự nhiên, Y* Sản lượng, Y Đường tổng cung dài hạn  Đường  tổng cung dài hạn Đường tổng cung dài hạn là đường... Mundell-Fleming) P↓ và giả sử TGHĐ danh nghĩa không đổi hàng Việt Nam trở nên rẻ tương đối so với hàng nước ngoài X↑ và IM↓ NX↑ AD↑ Các nhân tố làm dịch chuyển AD  Tiêu dùng (C)  Đầu tư (I)  Chi tiêu chính phủ (G)  Xuất khẩu (X)  Nhập khẩu (IM) 2 Tổng cung (Aggregate Supply)  Tổng cung là mức sản lượng mà các doanh nghiệp trong nước sẵn sàng và có khả năng sản xuất và cung ứng  S: Sẵn sàng và khả năng... < P0 và Y1 < Y*: → P↓ và Y↓ → cắt giảm sản xuất và việc làm → U↑: Suy thoái Cú sốc cầu 2 Dẫn đến sản lượng giảm trong ngấn hạn P ASLR AS A P B P2 1 Sự giảm sút Trong tổng cầu AD AD2 0 Y2 Y* Y Cú sốc cầu ... the corresponding movement of the equilibrium, from E0 to E1, to a lower quantity of output and a lower price level, is shown in [link] (b) Shifts in Aggregate Demand (a) An increase in consumer... original equilibrium (E0) In this example, the new equilibrium (E1) is also closer to potential GDP An increase in government spending or a cut in taxes that leads to a rise in consumer spending... compared with the original equilibrium (E0) In this example, the new equilibrium (E1) is also farther below potential GDP A decrease in 3/8 Shifts in Aggregate Demand government spending or higher taxes