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Keynesianeffectmodel2.pptxBUS360: Macroeconomics B: Lecture 3
1
r
Y
O
IS
LM1
LM0
Y
Y
O
450
Y0
YF
Y0
YF
O
W/P
L
SL
DL
O
L
Y
LF
LF
L0
L0
EO
E1
(W/P)0
(W/P)1
(a)
(b)
(c)
(d)
Diagram 3.4
The general case with Keynesian Effect
N
Y
O
N
ω
O
SN
DN
Y
N
N
W
O
P
Y
AS
AD0 (M0)
AD1 (M1)
AD2 (M2)
O
P
ω
ω
P1
P2
W 1
W 2
2. Production Function
1. Labour Market
3. AS – AD Curves
4. Money – wage Determination
Diagram 9
2
BUS360: Macroeconomics B: Lecture 2
