FINA60052: Session 3: The aggregate demand/aggregate supply and The multiplier model

Description

Discuss the historical development of macroeconomics
Explain the shape of the aggregate demand curve and what factors shift the curve
Explain the shape of the short-run aggregate supply curve and what factors shift the curve
Explain the shape of the long-run aggregate supply curve
Show the effects of shifts of the aggregate demand and aggregate supply curves on price level and output in both short run and long run
Explain how dynamic feedback effects can destabilize the economy
Discuss the limitations of the macro policy model
Explain the difference between induced and autonomous expenditures
Demonstrate how the level of income is graphically determined in the multiplier model
Use the multiplier equation to determine equilibrium income
Explain how the multiplier process amplifies shifts in autonomous expenditures
Demonstrate how fiscal policy can eliminate recessionary and inflationary gaps
Discuss six reasons why the multiplier model might be misleading