ECSENOMICS Chapter 31 Unemployment and the foundations of Aggregate Supply 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 31 Unemployment and the Foundations of Aggregate Supply
ECSENOMICS How Do Growth in Potential Output and Cost Increases Affect Aggregate Supply T230 Figure 31-1 (a) Increase in Potential Output (b) Increase in Costs AS Potential Potentia AS Q Q Real output 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. T-230 Figure 31-1 How Do Growth in Potential Output and Cost Increases Affect Aggregate Supply?
ECSENOMICS In Reality, Aggregate Supply Shifts Combine t Cost Increases and Increased Potential Output T231 Figure 31-2 Aggregate Supply and potential Output 1.8 6 AS’ curve for 1999 4 E 11.2 0.8 0.6 AS curve for 1982 0.4 0.2 2,000 4.000 6.0008,00010,000 Real GDP(billions, 1996 prices) 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. In Reality, Aggregate Supply Shifts Combine Cost Increases and Increased Potential Output T-231 Figure 31-2
ECSENOMICS AS Is Relatively Flat in the Short Run s but Turns Vertical in the Long Run T232 Figure 31-3 (a)Short Run (b) Long run AS Real outp eal 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. AS Is Relatively Flat in the Short Run but Turns Vertical in the Long Run T-232 Figure 31-3
ECSENOMICS Labor-Force status of the Population, 1999 T233 Figure 31-4 Males Females Not in labor force Not in labor force 55-64 Employed Employed 20-24 16-19 09 20% 40% V60% 80% 1009 Ut loved McGraw-Hilllrwin Source: U.S. Department of Labor, Employment and Earnings
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. Labor-Force Status of the Population, 1999 T-233 Figure 31-4 Source: U.S. Department of Labor, Employment and Earnings