文档介绍：Aggregate Demand and Aggregate Supply
Chapter 31
Short-Run Economic Fluctuations
Economic activity fluctuates from year to year.
In most years production of goods and services rises.
On average over the past 50 years, production in the . economy has grown by about 3 percent per year.
In some years normal growth does not occur, causing a recession.
Short-Run Economic Fluctuations
A recession is a period of declining real GDP, falling es, and rising unemployment.
A depression is a severe recession.
Three Key Facts About Economic Fluctuations
Economic fluctuations are irregular and unpredictable.
Fluctuations in the economy are often called the business cycle.
Most macroeconomic variables fluctuate together.
As output falls, unemployment rises.
Recessions
(a) Real GDP
Billions of
1992 Dollars
1965
1970
1975
1980
1985
1990
1995
2,500
3,000
3,500
4,000
4,500
5,000
5,500
6,000
6,500
$7,000
Real GDP
A Look At Short-Run Economic Fluctuations
Three Key Facts About Economic Fluctuations
Most macroeconomic variables fluctuate together.
Most macroeconomic variables that measure some type of e or production fluctuate closely together.
Although many macroeconomic variables fluctuate together, they fluctuate by different amounts.
Recessions
(b) Investment Spending
Billions of
1992 Dollars
300
400
500
600
700
800
900
1,000
$1,100
Investment spending
1965
1970
1975
1980
1985
1990
1995
A Look At Short-Run Economic Fluctuations
Three Key Facts About Economic Fluctuations
As output falls, unemployment rises.
Changes in real GDP are inversely related to changes in the unemployment rate.
During times of recession, unemployment rises substantially.
Recessions
(c) Unemployment Rate
Unemployment rate
0
2
4
6
8
10
12
1965
1970
1975
1980
1985
1990
1995
Percent of
Labor Force
A Look At Short-Run Economic Fluctuations
How the Short Run Differs From the Long Run
Most economists believe that classical theory describ