Chapter 35

Chapter 35 revisits the unemployment and inflation topic and tries to go more in depth. There is a short run tradeoff between unemployment and inflation. The Phillips curve represents this trade off in a graph of unemployment and inflation which slopes downward. It shows how inflation and unemployment change in response to changes in aggregate demand and aggregate supply. The long run Phillips curve is completely inelastic and vertical. It is affected by the natural rate of unemployment and instead demonstrates monetary neutrality. This chapter goes really in depth and again utilizes two graphs at once making it more difficult to grasp, so I would give this chapter a 2 out of 3.

Chapter 34

Chapter 34 is similar to chapter 33 in that both go in depth on short run fluctuations in the economy. This chapter looks at the reasons why the aggregate demand curve is sloped downward. The most important reason it slopes downward is because of the interest rate effect. This says that since the price level is lower less people want to hold money on them and therefore they will want to lend it. This causes the interest rate to go down. So far this chapter is not too hard to understand. I give it a 1.5 out of 3.

Chapter 33

Chapter 33 focuses on aggregate supply and aggregate demand. The chapter dials in on a lot of short term fluctuations which is really something new in our class since so far we have only talked about things in the long term. There are many things that influence aggregate supply and demand.  Somethings even being unpredictable. These influences can shift the curves and the shifts are what affect the GDP. I give this chapter a 2.5 out of 3. There is a lot of information that is very dense so i hope we spend longer than usual going over all of this like we did the last chapter.