Lesson 5: Introduction to Economic Fluctuations
Lesson Objectives
- Review the distinction between the long-run and the short-run
- Review the idea of potential output
- Introduce the notion of economic shocks
- Understand the difference between classical and Keynesian economics
- Understand wage and price stickiness
- Introduce the aggregate supply and demand model
- 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
Short-run Fluctuations: An Introduction
Videos
Keynesian and Classical Economics
Wage and Price Stickiness
Introduction to Aggregate Supply and Demand
Inflation Causes
Study Aids
- Problem sheet
- Answer key to problem sheet
- Key concepts
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