Post on 25-Dec-2015
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Macroeconomics
Last Min Prep & Important Points
Chapter 10
Economy in Short Run Okuns law – dec in unemployment – poor economy short run prices are sticky – classical theory – monetary neutrality only change in nominal valyes py = mv for inc output and fixed velocity and money supply, price deacreases supply side shocks – stagntions and inflation – stagflation – fed pumps in money to shift
demand curve to right
Chapter 11
ISLM prices are sticky in shrot run planned expenditure – what firms, houses and govt would like to spend if AE>PE, inventory inventory accumulate pe = c(y-t) + I + G tax cuts and inc in govt spending increase Y is curve plotted for a fixed Investment