Aggregate Model AP

Match

Match the following traits of Basic Supply & Demand to the correct image or terminology.

• Price, Quantity, Supply, Demand

• Price Level, Output(Real GDP), SRAS, AD, LRAS

Basic Demand Graph

Basic Supply Graph

Basic S&D Terminology

Aggregate Model

Aggregate Terminology

• Basic Demand Graph

• Basic Supply Graph

• Basic S&D Terminology

• Aggregate Model

• Aggregate Terminology

Drag and Drop

On a BASIC Supply & Demand graph we label​

Placeholder

​ on the Y-axis and

Placeholder

on the X-axis. The downward sloping curve the represents consumers willingness to buy is called ​

Placeholder

. The upward sloping curve that represents producers willingness to sell is called ​

Placeholder

.

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Price

Quantity

Demand

Supply

Drag and Drop

When looking at supply and demand on the AGGREGATE Model, we label on the Y-axis ​

Placeholder

and on the X-axis ​​

Placeholder

or ​ Real GDP .

The downward sloping curve is called ​

Placeholder

or​ AD , this curve represents ​

Placeholder

or the total production of all FINAL goods made in a country in a given year.

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Price Level

Output

Aggregate Demand

GDP

Drag and Drop

The upward sloping curve is called ​

Placeholder

or​ ​ SRAS , this curve represents what we can currently produce in a given year.

The VERTICAL curve is called ​

Placeholder

or ​ LRAS , this curve represents our POTENITAL supply.

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Short-Run Aggregate Supply

Long-Run Aggregate Supply

Multiple Select

What does aggregate demand (AD) represent? (SELECT ALL THAT APPLY)

• Represent ALL goods & services demanded in an economy

• GDP

• Everything a producer supplies

• Total Output of an economy

Multiple Choice

When GDP is low, what happens on the Business Cycle?

• Recession

• Expansion

Multiple Choice

So when AD decreases, what happens on the Business Cycle?

• Recession

• Expansion

Multiple Choice

All of these represent a decrease in Aggregate Demand EXCEPT

• Recession

• Cyclical Unemployment

• Deflation

• High Output

​Normal (Efficient) Economy

​An economy is now beginning to experience low gdp & high unemployment

Multiple Choice

When GDP increases, what happens on the Business Cycle?

• Recession

• Expansion

Multiple Choice

So when AD increases (GDP increasing) , what happens on the Business Cycle?

• Recession

• Expansion

Multiple Choice

All of these represent an increase in Aggregate Demand EXCEPT

• Expansion

• Cyclical Unemployment

• Demand Pull Inflation

• High Output

​Normal (Efficient) Economy

​Beginning to experience too high gdp and inflation

Multiple Select

Select all that causes AD to move on the Aggregate Model

• Interest Rates & Exchange Rates

• Exports & Imports

• Taxes & Consumer Income

• Factors of Production

• Business investment & Govt. Spending

Multiple Choice

What does SRAS represent?

• What producers are able to currently produce with available resources

• What is currently being demanded by consumers

• All available products for both the present & future

• All the available products that are being used

Multiple Select

Select the two Negative Supply Shocks that will shift SRAS to the left.

• Hurricanes, tornados, Tsunamis, major floods, wind storms, earthquakes.

• Oil costs more to buy or there is a limited amount

• Total Loss of ALL resources

• Govt. Spending

Open Ended

Why do you believe natural disasters & oil becoming expensive will affect what producers can currently produce?

​Normal (Efficient) Economy

​Negative Supply Shock Occurs

​Causes both prices to rise and low output (high unemployment)

Multiple Choice

All of these represent SRAS decreasing EXCEPT

• Cost-Push inflation

• Cyclical Unemployment

• Low output

• AD decreasing

​This one DOES NOT have an actual name (cause it rarely happens)

Multiple Choice

All of these represent SRAS increasing EXCEPT

• Deflation

• Low Unemployment

• High output

• AD increasing

Match

Match the following reasons that Supply curves will change/shift to the correct type of Supply.

• Natural Disasters

• Oil becoming cheaper

• Number of Sellers in the Market

Negative Supply Shock (shift SRAS to the left)

Positive Supply Shock

(shift SRAS to the right)

Basic Supply Change (NOT AGGREGATE)

• Negative Supply Shock (shift SRAS to the left)

• Positive Supply Shock

  (shift SRAS to the right)

• Basic Supply Change (NOT AGGREGATE)

​PPC (This is the same as LRAS)

LRAS (This is the same as PPC)

Multiple Select

What makes the PPC increase (move): Select all that apply

• New resources

• New technology

• New Land, Labor Capital

• More producers

Multiple Select

What makes the LRAS curve increase (move): Select all that apply

• New resources

• New technology

• New Land, Labor Capital

• More producers

​This will eventually cause the whole model to shift

Match

Match the following changes to the correct Aggregate Model shift.

• Americans receive stimulus checks during COVID.

• An earthquake has struck the entirety of the US.

• Interest rates have increase to 8.9%

• Oil becomes a free resource for the next 6 months

• Scientists have created new technology that creates organic food instantly.

AD increases

SRAS decreases

AD decreases

SRAS increases

LRAS increase

• AD increases

• SRAS decreases

• AD decreases

• SRAS increases

• LRAS increase

Match

Match the following images to the correct gap or change.

Recessionary GAP (AD decreases)

Inflationary/ Expansionary GAP (AD increases)

Stagflation

(decrease in SRAS)

Economic Growth (LRAS increase)

• Recessionary GAP (AD decreases)

• Inflationary/ Expansionary GAP (AD increases)

• Stagflation

  (decrease in SRAS)

• Economic Growth (LRAS increase)

Categorize

Options (11)

Government can use increase in spending and cut taxes to fix

LOW GDP

High Unemployment

Deflation

Low unemployent

HIGH GDP

Demand-Pull Inflation

Also called inflationary gap

Govt could decrease spending and raise taxes to fix

Organize these options into the right categories

Recessionary Gap

Expansionary Gap

Categorize

Options (8)

LOW GDP

High Unemployment

Cost-Push Inflation

Low unemployent

HIGH GDP

Deflation

Organize these options into the right categories

Stagflation

Positive Supply Shock