Thursday, April 7, 2011

Extending the Analysis of Aggregate Supply

OBJECTIVES 

Students shall be able to

1. Explain the difference between the short-run and long-run aggregate supply curves and their significance for economic policy.

2. Distinguish between demand-pull and cost-push inflation using the aggregate demand-aggregate supply model.

3. Explain and construct a traditional short-run Phillips Curve using the aggregate demand-aggregate supply model.

4. Differentiate between the short-run and long-run Phillips Curves.

5. Identify the supply side shocks to the U.S. economy in the 1970s and 1980s.

6. Use an aggregate demand aggregate supply graph to show how supply side shocks led to stagflation in the 1970s and 1980s.

7. Explain why demand management policies cannot eliminate stagflation.

8. Distinguish between demand pull and cost push inflation using the aggregate demand aggregate supply model.

9. Explain two possible effects of taxation on aggregate supply.

10. Explain the Laffer Curve concept and list three criticisms of this theory.

11. Define and identify terms at the end of the chapter.
     

ACTIVITIES

1. Quiz on M&B Chapter 16: Extending the Analysis of Aggregate Supply

Assignments:

1. Take the M&B Chapter 16 quiz

2. Study for test on Monetary Policy and Phillips Curve/Laffer Curve/Supply side

 

ASSESSMENT PROCEDURES

Monitor and adjust to check understanding.