Mr. Henry

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Mr. Henry Aggregate Supply 588-591 AP Economics

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Aggregate Supply 588-591. AP Economics. Mr. Henry. Review from AD: What issues do you see in aggregate demand if people are saving more and spending less, thus a shift of the demand curve to the left?. - PowerPoint PPT Presentation

Transcript of Mr. Henry

Mr. HenryAggregate Supply588-591AP EconomicsTo view this presentation, first, turn up your volume and second, launch the self-running slide show.1Review from AD:What issues do you see in aggregate demand if people are saving more and spending less, thus a shift of the demand curve to the left?

Give them those things in a clear, easily understandable way2

What is Aggregate Supply?The total value of all goods & services that all firms would produce in a specific period of time at various price levels.Combining minimal text with meaningful visuals means that youll reach everyone.3

The three horizons:In the immediate short run, both input prices as well as output pricesare fixed

In the short run, input prices are fixed, but output prices can vary

In the long run, input prices as well as output prices can vary

AS varies depending on the time horizon and how quickly output prices and input prices can changeVariables of Time for ASTo view this presentation, first, turn up your volume and second, launch the self-running slide show.4

This can last from a few days to a few monthsIt lasts as long as both input prices and output prices stay fixed.This supply curve is horizontal because output prices are fixed and firmsare selling however much customers want to purchase at those fixedprices.Can you think of an example?Appliance Manufacturers will set an annual list of pricesCar manufacturers will set their MSRP on cars and trucks

AS in the Immediate Short RunImmediate short run

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Period of time during which output prices are flexible, but input pricesare either totally fixed or highly inflexibleIt is short run because prices that a consumer is charged can change.This supply curve slopes upward because, with input prices fixed, changes in the price level will raise or lower real firm profitsWhat do you notice about this curve before and after QfNotice that the AS curve is relatively flat below the full-employmentoutput because unemployed resources and unused capacity allow firmsto respond to price-level rises with large increases in real outputIt is relatively steep beyond the full employment output becauseresource shortages & capacity limitations make it difficult to expandExample: UPS labor costs (Input) are fixed by contracts but can changeShipping costs to its customers (output flexible)

AS in the short run

To view this presentation, first, turn up your volume and second, launch the self-running slide show.6http://www.youtube.com/watch?v=3nbalsyibKU&list=PLAEA5E9ACA1508F92&feature=share&index=90

Period of time during which both input prices as well as output pricesare flexible. It begins after the short run ends.It may be from a couple of weeks to several years in the future.This supply curve is vertical because in the long run, the economy will produce the full-employment output level no matter what the price levelWhat limits firms from increasing output if there were higher prices?Labor shortages / workers demand more $ or overtime payDemand on the economys limited supply of resources= rising input prices subtracted away from firms profitsCan you think of any examples that illustrate this?Some business may not expand because of new taxes / health careTechnology advancements, such as the computer, make production cheaper.

AS in the long run

To view this presentation, first, turn up your volume and second, launch the self-running slide show.8http://youtu.be/8W0iZk8Yxhs

Why is it that the economy doesnt flow??For more than 20 years, Duarte has developed presentations10

Dto launch products, 11

Lack of consumer confidenceDeclining housing pricesConsumers save morealign employees, 12

when the country and the economy is trying to expand and growincrease company value,13

But the (FOMC) pulls money in from circulation, and is instituting a restrictive monetary policyand propel14

So, consumers and businesses also tend to be like squirrels when there is a lack of confidence in what is happening in the economy. This causes them to cut back their spending, stop eating out, stop spending money on anything that is not a necessity. Without this money flowing through the businesses that consumers and businesses patronize, then it is also prohibits the money from reaching the general economy. Again, this will cause slow economic growth.It leads to one of the primary causes of slow economic growth!Theyre there to see you. To be inspired by your message15

But dont hide behind your slides.16

Presentations are a powerful communication medium.

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