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Chapter 8 Notes AD & AS

The document discusses the relationship between aggregate demand (AD) and aggregate supply (AS), highlighting conditions under which they intersect and the implications for employment and output levels. It also covers the concept of the multiplier effect in economics, explaining how changes in investment can influence overall income and consumption. Additionally, it addresses stock management and the importance of maintaining a balance between planned and unplanned stock levels.

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5 views15 pages

Chapter 8 Notes AD & AS

The document discusses the relationship between aggregate demand (AD) and aggregate supply (AS), highlighting conditions under which they intersect and the implications for employment and output levels. It also covers the concept of the multiplier effect in economics, explaining how changes in investment can influence overall income and consumption. Additionally, it addresses stock management and the importance of maintaining a balance between planned and unplanned stock levels.

Uploaded by

yadavayuah5901
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF or read online on Scribd
| oe Eytan Srtome _ oe ' | : =H St Kees 2 al hel wantorns ushers ery oe ae iat 6 4 enter — | pe | Time ee | 2 | Tue ‘abautd be desea areaniiae) | tracle utith other countres ae 3+ | The genial price Aue should he fin: 4° | Thur! bhowlel ro torus aEor a oped ‘Note’ tyitlin: freon ib albo baad ty Proue that S=I where AD=AS.° _Ouuus ce | At bgutlbstum Awe Senne ened [At te = pas £+1i ai [eS || - : items of Egat igeceare [ 7 sf Dépperertt Approochis |] | (in LS AD-AS S-I s Tenaga 3 tonol + wail omy | ap AS ~ oof Ao = AS ie S <2 AD AS O. (AD =AS @_fD AS bete————— z a Fal naa ei GS. trough AOTAS Abproo fv () QV |as 1 30 ths gun oleagram AD is thr comand dnl ns? is the “99° Both interiut at font £ Bead, ao=as. “fu thi point _of Zyss! Brpoke pont AD DAS: At output og P's ambunt ! y AP i more than TA Pe: AS uthith ib eqeot to ST- [sg~ Pg = STf r YARD AS then consumption ib AA .cncl\ Ve are Low Now the Stock qf untolol gooals uu re dotcl aut. Now pro A itl z do intense the procduiliin - Lo ae qortoss well LROKEQAEL + Mat wpe ApS 106 |[I2o_ ~20 fo [60 loo PD AS Loo |2oo © ho 140 ‘200 AD > AS 300 |280 20 40 320 300 AD 2 AS 4o0 [360 404 400 406 vAD = AS 500 |i440 60. -4y 486 500 Apc As boo: 1520 80> 40 5éou + 606. AD < AS I 3 } x | Determination ‘. 4) Srv. Prous S-1 Approach a Ih | OS | Through $-1 Appheach Sidenditions will tmange — miso @ S=2 © s I =a fan agin Sl Sis) the suse J Lou Bett_inttsect of pein) 5 Stine fab Oe Sasusrgs and InuckGrant are eqyial « Ages point E chant more than Iniwstment - i hades tae pele. woul feoluce which factor Incemv os and ths end * will online ur) Seuungs emt equal to Snwastment § fy tual y Sntome 6 that Joust 1G 4 Sates whe S=1! aboue diogharm : sep. S is thy Sung Vue 9 I He drvest. TH Satung cure etarts (cme) Yeas whol Shout thy will a Som -urhen entome i O Jano] lyk cwndumen + SPL curaue both intersect at phot e wher “Uw pact oy Gis determincol + | sa shb & ee eel are not ba role nes tn dyeit but 20 Sruutinent : 7 Eiasigh Caan A Approbeh AS ww Gr=0) Se tis quen diagpare ADs ty Ayg- durand anol ft Gs Ag: Suppty “hott. ineerseot af poodd © Uo [a foot Guittd. from point & we craw ow A ‘ [Link] whith touchs crust] ‘uudue at point Er. Scuury rus Stall fromm the i “Ye aus become when irneome iso, hear Wil be seme Condumptrery and Hus » . Comes - {rom the fast Soutnes + Sawing Curae inttisebs cust, ‘cuaue ot 4 point EL where Seung f tnivatmant ave egal ‘ So ushere AD 2 AS || Seung oto is equal Sruustrent « | AD = AS | - Lt = £45 | I 25 : Gin endl“ Emplagrent / = : - 7 4 Ulhen AD Zz AS thue WA deal Eenpogrnerd Do! ; Se alin 8 tbu— fut &mpleyment £9 tutltbruun . | = \\"P\ re OU the Aesources cn. Hho tana gl Hitied. oF Gd feud prea oh ~rbauboy |nkmp+ cS extaty + as pat ital colt the avatlable Aesourtes. $n thes Schuster. AD i ap twp AS. Ths ts the Geel semdtion vihich enemy try the worth hous olusite € ie aS Unolt — Hiss | mas tea Sis OR St xepers to thy dituotior~ here aU thy Aloureys are l not polly enol iently ublliseel means : nots but uly thar the ful : at fi : : } a +e Heanung of Irustabment Mit pita \ develop by Rif. hahn- on Ais article ' - J | 6 she pblation y teme tnutstment to weap Kahn’ muslipih (Las Employment mrutelpl =o Vehonge in trusts 7 > SRG Aueu to the nated y ph reer tb T ths hits denstid vo _ | ay face ay | _ far] eT i foams yf Irusestment M whe a Lt — = a (P| Fomsarcl, Mectiplrer ” (® - borkuword oe _ ft Gplains what will > St Explains that what 2 be the Increase in * : ‘will be the dlecrease income due to the 13 In Inceme clue to the | Srertase in Sruestm: decmage “in. Inucstment . | Relations hip Ba Multiplier. Art MPC — mpc fp K ore Directly slated Uf means higher thon MPC , move udll. be the value op rraathsp its pw — et moe oS SE | Prose tha? R= 5 7 oe = I- MPC MPS We trow that — : : 77 = ‘ ay om taking Db both the Sicles Pe ees AG eos =} fe dliuicling by 04 both the Sicles ms Ay = oc +41 ot ay) 84 ay be MPC+ py k= 49 4 Kt az J (close te ae I= MPC Sine Mec + MPS =L fence kK = tL -- MPS g. cua ale ete inser frenlrrard ala a ay aa — i fe a \ ke ae zt Ind zt = Qo 0 Jf | on [k= so) a 6 + | provctmene value t/ Mmublll’pties Act Mpc 20 , ket. I- MPC ke 1. | ) —_ i OES | pay A Téxpuin tu ' ngvey Sruuebrreent MuLUpbien p: plain thy pos fey a Explain with Uy hup qf numaiial Exeplthoso an I s : u UuUnwse in wruassmadt in He enemy Spiel the Aruuel of _uneeme : | ! OR — Dine Muphr'pbix_f what is the Aeosier df'o MPC Pano! mustipuis Ogee ous (otuwlate multiplier wshun MPC = Prom He catuulabor elablsh Us relation blw ty Sine af multiplies f Ha sine o MPC - =) Seb | dnso det AL i (O08 Ou — RiGee ost oe = — | 2 = Sage Vian at L 100 (COR En CO aoa e oi = Or ONO) [am a2 aS ag nee ES | a i i= — | 1 1 : ' ' 1 ! i wo Loo 200 22 ; a : Seca e - | T- MPC a ok iL | on _ 1-05 = Ke 4 ts = 22) z Os __ K= 44 Ot | —_ 284 | 100 | AY = L200 wy) : 41 fruuestinent Ururentes 100 O-'amcl MPC will be 0:6 thaw, Jneorne uitll be double fe tee The uorking of Cruectment multiplier is based er thr got one person’ f expiroliture in | tv ’ °. cur ther, f__lrtwerre . | a. e280 1433 am a4. LL = DC) 2 * 100 ee oF 4¢ a 100 [4c = 50 care] a St00k, [Sruertony | = Stock is thi stock Le | qeccls urith phocluern ushith he Astel Y ith . future demanel : Lape - writin -fitun Unolezinedl [Unplonnecl Stock — ft the unclesinec Stock uiith the spreolucer ahlsing me mismatch betwen “AD and AS. | Dusred Steck — ft be, planned Ateck usher 4 POE AS ancl proolucts' Un the ote dtate sili: ae detual Steck — FH ineluales Desirecl Stock and unolesrecl steK™ | actual Stock = Closing Stock mopening Staek Cea ] — g. | De you ogee that by ining tha sel _ (niestinent in the \canersp the yok Untenicol to House wali ig output rrultiplicn 9 Ars. | No, because that Aas: nothuy te ale dhath a the mubliplicr which & two o upon the” MPG of the Consumer Hence, gisen, Ateitemdrt treorrect « : t-[k=4.. 2- kK2d “3s Kz OY MPS J-MPC 4t v OY ts pluer an sequined than ube both por fo a S00 MPC 2 OS at ay Oc S00 S00 Soo fos 2 250 = 250 iso Kos = 12S - hse Ds Xors > 62'S | Sto loo 100 X0°S = SO k > 1 l=mpc Kr jy i 1- os d eee ! Os Ko2eat 2 = sa0 H Kr AY \ AL 622 AY | b00 4 2 1000 = (| Ar z 1006 “MPC > 0:25 road AL ay bc = 4000 1000 1000 KOs 2 26D ob = wo x 150 yous CEG = OE 62:5 Ro th ae = | ka | oo - | mpc Kr 1 le _ Kz tL : ong! ine eS — — i | = ko 44 | 7 L 3 — Aye a + __[000 | AY? 1-3X 10002 | 13009 a) = : a = = = _ + _ 2 | a

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