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TERM PAPER PRESENTATION ON

1)LONGRUN AGGREGATE SUPPLY CURVE 2)LONG RUN AGGREGATE DEMAND CURVE 3)INFLATION GROWTH

PRESENTED BY-

R.V. ADITYA KUMAR(131204)

ATUL KUMAR PRASAD(131205)

RAGHVENDRA KUMAR(131206)

K.ASHRITHA(131251)

HARIKA(131250)

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LONG RUN AGGREGATE SUPPLY CURVE

It doesn’t depends on price. It depends on factors of production-1. Natural resource2. Marginal efficiency of capital 3. Labor productivity 4. Technology superiority.

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LONG RUN AGGREGATE SUPPLY CURVE

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IN THE LONG RUN-

1. Technology progress reflects to the right, the aggregate supply curve.

2. The growth in money supply shifts aggregate demand.

3. Leading to growth in output 4. Ongoing inflation.

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LONG RUN AGGREGATE DEMAND CURVE

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QUANTITY THEORY OF MONEYMV=PY

M = money supply, V = velocity of money, P = price level, Y = real GDP

Assumptions: V is constant Money has no effect on real variables (so ΔM

has no effect on Y) Y is entirely determined by the fixed stock of

labor, capital and technology

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SOME POINTS ON INFLATION AND GROWTH

Inflation doesn’t affects us when growth of income is more then inflation.

Inflation is good because it attracts investment.

Some time to control inflation we have to control growth.

Various tool having RBI to control inflation-1. CRR2. SLR3. TAX and REVENUES.

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Thank you…