Hi,

I have a question bugging me if u have studied economics...

GDP = C+G+I+X-M

AD is also this equation.

However, when looking at the AD AS curves, is the point where they cross the actual GDP of that country?

Also, if AD continues to rise up the long run AS, as a horizontal line, this is said to be representative of inflation.

However, although output cannot increase anymore, the value of that output is increasing, as P is increasing,

So cant technically GDP still increase?

Does anyone know what the frig im on about?!



Peace

when demand is high, and supply is low, prices increase. conversely, when demand is low and supply is high, prices fall.

Umm...

Actually, hate to break this to you, this economic stuff doesn't really matter. The only thing that matters is, how can I put food on the table and are their forces that try to stop me. They use this complex crap to confuse us. Economics is about the basics of need and the complexity of the class system in America and the world. Simple. Burp.

GDP = The Gross Domestic Product. Let me break out my Macro Economics book and I will get back to you

When in doubt always choose C.

Guns and butter, baby!

Guns and butter!

SureThing said:

OMG what would I do without u

2the9s said:

I said I'll fuck you up, Bitch!

DanceWme said:

No, what would I do with out you?

Your the only one who laughs at me.

SureThing said:

Err.. should have not asked this should I!

SureThing said:

You know actually, as odd as this sounds, this is actually a good test taking theory, as a teacher we tell our students on the state standardized tests, if you are in doubt pick either C, or if there is an all of the above in the answer, choose all of the above! So thats a pretty great strategy. Your smarter than you thought.

karmatornado said:

No, I knew I was smart all along, but Thanks.

Well, sorta I've watched "Wall Street" a couple of times (really good film, you know, very much enjoyed it ) so I hope that qualifies me in giving you this advice...


Lunch, PurpleHouse, IS FOR WIMPS!


That's all I can offer at this moment in time

GDP does not equal AD.

C+I+G+(X-M)=AD, not GDP.

Where AS and AD meet on the RNO line is GDP.

AD rising up the LRAS is inflation and nothing else. It's bad news. You can acheive more economic growth by expanding/shifting the LRAS rightwards. This therefore increases your potential (read=ideal) output. It is attainable through education & training, investment and increased productivity. It is an incredibly long run process. The aim of virtually all open economies is to acheive steady long run economic growth without inflation.

I took Economics when I was interested in being an Architecture major. That was 26 years ago and I don't recall those formulas. Have P.J. O'Rourke's "Wealth of Nations" about Adam Smith on my "must read" list.