Graphs Flashcards
What graph do you use for policy?
Fiscal and monetary policy - LRAS and AD
Expansionary - LRAS AND AD INCREASE
Contractionary - LRAS AND AD DECREASE
How about inflation?
Demand - pull - Increase in price from increase in AD
Cost push - Caused from supply side
What are the graphs for unemployment?
Keynesian unemployment- LRAS AND AD LEFT
Classical - 3 lines down
Neo classical - SRAS AND AD LEFT
How about for deflation?
Benign deflation - SRAS right and AD same
Malign deflation - caused by lack of AD - AD DECREASE ON SRAS
What for exchange rate?
Demand or supply normal graph with one changing
How about long run growth?
PPF LONG RUN - FULL EXPANSION
AS - AS RIGHT DEMAND SAME
What does the function of prices shift?
Right wards shift in demand
What about information failure?
Leftwards shift in demand
