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Math Help - how to graph this using AD AS graphs?

  1. #1
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    how to graph this using AD AS graphs?

    Total output grew at an estimated annual rate of 2.5 percent from July to September, still modest but almost double the 1.3 percent rate in the second quarter, the department reported.

    Using the aggregate demand & aggregate supply or production possibilities graph?
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  2. #2
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    Re: how to graph this using AD AS graphs?

    I dont really understand the question.

    an increase in total output may indicate a movement of (or along) any of those graphs, but not necessarily.

    What is your level of study? (high school, undergraduate)
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  3. #3
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    Re: how to graph this using AD AS graphs?

    here is the full statement of GDP

    i would like to know how i would graph this using the aggregate demand & aggregate supply or a PPF graph

    Gross domestic product (GDP), the broadest measure of all the goods
    and services produced in an economy, grew 2.5% in the third quarter,
    its strongest rise in a year and up from 1.3% in the second
    quarter. The performance is also a considerable improvement on the paltry 0.4% growth achieved in the first quarter of 2011.



    The third quarter GDP figures show consumer spent more on durable
    goods like cars and refrigerators and business investment surged in
    the third quarter. Real personal consumption increased 2.4% in the
    third quarter, compared with an increase of 0.7% in the second.


    Durable goods increased 4.1%, in contrast to a decrease of 5.3%.
    Businesses also are investing, especially in equipment and software.
    Nonresidential fixed investment jumped 16.3% after a 10.3% rise in the
    second quarter.
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  4. #4
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    Re: how to graph this using AD AS graphs?

    unless this is a very introductory level course i dont think there is enough information there to work out which curves are moving.

    If GDP has increased then aggregate demand has increased, but you cant tell if this is due to a shift of the aggregate demand curve or a movement along it combined with a shift of the supply curve.

    Im not going to try and analyse your post in terms of the PPF but i suspect that an analysis is impossible unless you assume the economy is at full employment (ie, on its frontier).
    Last edited by SpringFan25; December 7th 2011 at 12:09 PM.
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