Lesson 5: Introduction to Economic Fluctuations

Lesson Objectives

  1. Review the distinction between the long-run and the short-run
  2. Review the idea of potential output
  3. Introduce the notion of economic shocks
  4. Understand the difference between classical and Keynesian economics
  5. Understand wage and price stickiness
  6. Introduce the aggregate supply and demand model
  7. Introduce the response of inflation economic shocks (shifts in aggregate supply or demand)

Textbook Reading

  • Chapter 33: sections 33-1 and 33-2

Overview Lecture

Videos

Study Aids

  • Problem sheet
  • Answer key to problem sheet
  • Key concepts

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LESSON 5 PRACTICE QUIZ