Slide 1
Preview
Introduction
Determinants of Aggregate Demand
Determinants of Aggregate Demand
Determinants of Aggregate Demand (cont.)
How Real Exchange Rate Changes Affect the Current Account
Slide 8
Determinants of Aggregate Demand
Determinants of Aggregate Demand (cont.)
Determinants of Aggregate Demand (cont.)
Determinants of Aggregate Demand (cont.)
Short Run Equilibrium for Aggregate Demand and Output
Fig. 16-2: The Determination of Output in the Short Run
Short Run Equilibrium and the Exchange Rate: DD Schedule
Slide 16
Fig. 16-4: Deriving the DD Schedule
Slide 18
Shifting the DD Curve
Slide 20
Shifting the DD Curve (cont.)
Shifting the DD Curve (cont.)
Short Run Equilibrium in Asset Markets
Slide 24
Short Run Equilibrium in Asset Markets (cont.)
Short Run Equilibrium in Asset Markets: AA Curve
Fig. 16-7: The AA Schedule
Shifting the AA Curve
Shifting the AA Curve
Shifting the AA Curve (cont.)
Shifting the AA Curve (cont.)
Shifting the AA Curve (cont.)
Putting the Pieces Together: the DD and AA Curves
Putting the Pieces Together: the DD and AA Curves (cont.)
Slide 35
Fig. 16-9: How the Economy Reaches Its Short-Run Equilibrium
Temporary Changes in Monetary and Fiscal Policy
Temporary Changes in Monetary Policy
Fig. 16-10: Effects of a Temporary Increase in the Money Supply
Temporary Changes in Fiscal Policy
Fig. 16-11: Effects of a Temporary Fiscal Expansion
Policies to Maintain Full Employment
Slide 43
Slide 44
Policies to Maintain Full Employment (cont.)
Policies to Maintain Full Employment (cont.)
Permanent Changes in Monetary and Fiscal Policy
Permanent Changes in Monetary Policy
Slide 49
Effects of Permanent Changes in Monetary Policy in the Long Run
Slide 51
Effects of Permanent Changes in Fiscal Policy
Effects of Permanent Changes in Fiscal Policy (cont.)
Fig. 16-16: Effects of a Permanent Fiscal Expansion
Macroeconomic Policies and the Current Account
Slide 56
Macroeconomic Policies and the Current Account (cont.)
Macroeconomic Policies and the Current Account (cont.)
Macroeconomic Policies and the Current Account (cont.)
Slide 60
Value Effect, Volume Effect and the J-curve
Fig. 16-18: The J-Curve
Value Effect, Volume Effect and the J-curve (cont.)
Value Effect, Volume Effect and the J-curve (cont.)
IS-LM Model
IS-LM Model (cont.)
IS-LM Model (cont.)
IS-LM Model (cont.)
IS-LM Model (cont.)
IS-LM Model (cont.)
IS-LM Model (cont.)
Effects of Temporary Changes in the Money Supply (cont.)
Slide 73
Effects of Temporary Changes in Fiscal Policy
Effects of Permanent Changes in Fiscal Policy
Summary
Summary (cont.)
Summary (cont.)
Summary (cont.)
Slide 80
Table 16-1: Factors Determining the Current Account
Fig. 16-1: Aggregate Demand as a Function of Output
Fig. 16A1-1: Change in Output and Saving
Slide 84