Stages of the Business Cycle

Aggregate Demand and Supply

Aggregate Demand

Aggregate means “total”

Total demand for ALL FINAL goods and services in the economy from all people in the economy for all prices levels.

Aggregate demand consists of: consumer spending (C), investment spending (I), government spending (G), net export spending (NX).

If any component increases, GDP increases, AD curve shifts right.

If any component decreases, GDP decreases, AD curve shifts left

Aggregate Supply

Total production of ALL FINAL goods and services in the economy from all poducers in the economy for all prices levels

Conclusion

An economic indicator is a statistic about an economic activity. Economic indicators allow analysis of economic performance and predictions of future performance. One application of economic indicators is the study of business cycles. Economic indicators include various indices, earnings reports, and economic summaries. Examples: unemployment rate, quits rate, housing starts, consumer price index (a measure for inflation), consumer leverage ratio, industrial production, bankruptcies, gross domestic product, broadband internet penetration, retail sales, stock market prices, money supply changes.

 

Control questions:

1. What does mean Gross Domestic Product?

2. Can you give more information about Aggregate Demand and Supply?

3. What do you know aboutBusiness Cycle?

4. Give more information about Unemployment Rate.

5. What do you think about frictional unemployment?

Literature

1. English for economists and managers: textbook/ O. V. Ulyanov, S. V. Grishin; yurginskiy technological Institute. – Tomsk: Publishing house of Tomsk Polytechnic University-theta, 2011. – 111 p.

2. Besanko D.A, Brauetugam R.R, Gibbs M.J Microeconomics,2011, Chicago

3. Griffiths A, Wall S.Economics for business and management,2011, England

4. Varian H.R. Intermediate microeconomics,2010, University of California at Berkeley

5. Boyd, W. Harper. Marketing Management.- Boston, 2010