12.2 Materials

READ

    • Chapter 12.2
    • (Optional) Read Chapter 12.3. While this section is not required, it will be useful for you to read it. It will help you understand how to use the model to understand real life situations.

WATCH

 

The next video explains the transition from the short run to the long run. Note that they use an increasing SRAS instead of a flat AS as in Mankiw. In the book Mankiw considers a simpler version in which in the very short run AS is completely horizontal because prices and wages are very sticky. If prices and wages are a little less sticky, SRAS is increasing. This is the case that the video considers.

 


PRACTICE


DEBATE

    • Participate in the group activity. 

DO