Equilibrium in the AD-AS Model
Diperkenalkan| English | Makna |
|---|---|
| AD-AS model/ˌeɪ ˈdiː ˌeɪ ˈes ˈmɒdl/ | model AD-AS |
| short-run macroeconomic equilibrium/ʃɔːt rʌn ˌmækrəˌriːkəˈnɒmɪk ˌiːkwɪˈlɪbrɪəm/ | keseimbangan makroekonomi jangka pendek |
| full-employment equilibrium/fʊl emˈplɔɪmənt ˌiːkwɪˈlɪbrɪəm/ | keseimbangan pekerjaan penuh |
| recessionary gap/rɪˈseʃənəri ɡæp/ | Kesenjangan resesi |
| inflationary gap/ɪnˈfleɪʃənəri ɡæp/ | Kesenjangan inflasi |
Demand and supply, for the whole economy
- Put aggregate demand and aggregate supply on one diagram.
- Where they cross sets the economy's price level and real output.
- Add the vertical LRAS, and you can see whether the economy is healthy.
- This is the AD-AS model 总需求-总供给模型.
Short-run equilibrium
- Short-run macroeconomic equilibrium 短期宏观经济均衡 is where AD crosses SRAS.
- There, the output buyers want equals the output firms make — no pressure to change.
- Read the equilibrium price level off the vertical axis and real output off the horizontal.
The AD-AS model
Short-run equilibrium is where AD meets SRAS. Compare it to LRAS — below potential is a recessionary gap, above is an inflationary gap.
Short-run macroeconomic equilibrium is where:
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Where AD meets SRAS, the output demanded equals the output supplied in the short run.
Three cases and the output gap
- Compare where the economy is (AD-SRAS crossing) with where it could sustainably be (LRAS).
- Output equals potential → full-employment equilibrium 充分就业均衡, no gap.
- Output below potential → a recessionary gap 衰退缺口, unemployment above natural.
- Output above potential → an inflationary gap 通货膨胀缺口, prices being pushed up.
If short-run equilibrium output is below potential (LRAS), the economy has:
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Output below potential means high unemployment — a recessionary gap.
When equilibrium output equals potential output, the economy is at ______-employment equilibrium.
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At full employment, AD, SRAS, and LRAS all meet at one point with no gap.
An inflationary gap means equilibrium output is below potential output.
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False. Output below potential is a recessionary gap. An inflationary gap is output above potential, which pushes prices up.
Match each equilibrium to its gap.
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Compare the AD-SRAS crossing with LRAS to name the gap.
A worked case
- Worked idea. LRAS (potential output) stands at 1,000b. AD and SRAS cross at 920b.
- Because 920 is less than 1,000, the economy has a recessionary gap of 80b.
- It is producing 80b below its sustainable capacity, so unemployment is above the natural rate.
- Had the crossing been at 1,060b, it would instead have an inflationary gap of 60b.
Potential output (LRAS) is 1,000 and AD-SRAS cross at 920. What is the output gap? (keep the sign)
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Output gap = 920 − 1,000 = −80 — a recessionary gap of 80.
The AD-AS model finds short-run equilibrium where AD meets SRAS. Compare it to LRAS (potential output): equal = full employment, below = a recessionary gap, above = an inflationary gap. The gap's size is the horizontal distance to LRAS.
Write from an output gap of minus 120
- Potential output is 1500. Short-run equilibrium is 1380.
- Find the output gap.
Long-run aggregate supply is at 1500 and short-run equilibrium is at 1380. What is the output gap, including its sign?
1380 is 120 below 1500.
What is the output gap?
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Short-run output is 120 below potential.