Lecture 12. The Real AD–AS Model (General Equilibrium Model, Real Aggregate Demand–Aggregate Supply Model)
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1. Notes
1. Notes
⑴ Real aggregate demand curve : Derived from the sum of consumption, investment, and government spending
⑵ Real aggregate supply curve : Derived from equilibrium in the labor market and from the aggregate production function
① Aggregate supply in the period-1 goods market
⑶ Equilibrium in the real sector : the r–Y curve
…
① Loanable funds market (loanable fund market) : the r–loanable funds curve
○ Forms part of the classical model
② Equilibrium in the loanable funds market
○ (Left-hand side) : Sum of private investment and the fiscal deficit → demand for loanable funds
○ (Right-hand side) : Private saving → supply of loanable funds
○ The equilibrium interest rate in the real sector is the same as the equilibrium interest rate in the loanable funds market
Posted: 2020.12.21 15:37