ECSENOMICS Chapter 23 Business fluctuations and the Theory of Aggregate Demand McGraw-Hilllrwin Copyright C 2001 The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. Chapter 23 Business Fluctuations and the Theory of Aggregate Demand
ECSENOMICS Business fluctuations have been a S Persistent Feature of Capitalism T-167 igure 23-1 Fi (=) Aggregate iteraction of ASand AD McGraw-Hilllrwin Copyright C 2001 The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. T-167 Figure 23-1 Business Fluctuations Have Been a Persistent Feature of Capitalism
ECSENOMICS A Business Cycle, Like the Year Has Its seasons T-168 Figure 23-2 Recession Peak Peak Peak 9Ev Trough Recession Trough McGraw-Hilllrwin Copyright C 2001 The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. A Business Cycle, Like the Year, Has Its Seasons T-168 Figure 23-2
ECSENOMICS Business Activity Since 1919 T-169 Figure 23-3 Bull-market World War Il 40F New era opert Kerean Persian cult Poster First oil New economy of 1990s McGraw-Hilllrwin Source: Federal Reserve Board, detrended by authors
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. Business Activity Since 1919 T-169 Figure 23-3 Source: Federal Reserve Board, detrended by authors
ECSENOMICS A Decline in Aggregate Demand t Leads to an Economic Downturn 1-170 Figure 23-4 P AS AD AD 3 B A AD Potential output Q Q Real output McGraw-Hilllrwin Copyright C 2001 The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. A Decline in Aggregate Demand Leads to an Economic Downturn T-170 Figure 23-4