Macroeconomic Equilibrium in Sinhala

සාර්ව ආර්ථික සමතුලිතය

Macroeconomic equilibrium is an economic state in an economy where the quantity of AD (Aggregate Demand) equals the quantity of AS (Aggregate Supply)

Aggregate Supply - සමාහාර සැපයුම

Ø  AS is the total supply of goods and services that firms in a national economy plan on selling during a specific time period

Ø  Other words AS is the total amount of goods and services produced and supplied by an economy’s firms over a period of time

Components of Aggregate Supply - සමාහාර සැපයුමේ සංරචක

v  Consumption ( C )

v  Saving ( S )

v  AS = C + S

Keynesian view of Aggregate Supply Curve - සමාහාර සැපයුම් වක්‍රය කේනිසියානු කෝණයෙන්

The Keynesian AS curve assume that prices and wages are fixed until full employment is reached.

Three ranges of Aggregate Supply Curve - සමාහාර සැපයුම් වක්‍රයේ වර්ග

v  Keynesian

v  Intermediate

v  Classical – in the classical range the economy is producing at full employment.

What is an Aggregate Supply Curve?

Aggregate Supply Curve describes the relationship between price levels and the quantity of output that firms are willing to provide. Normally there is a positive relationship between AS and the price level.

Why is AS so important?

Ø  Helps to ascertain the true status of macroeconomics value within a country.

Ø  Helps to pinpoint net increase or decrease from one period to the next.

Aggregate Demand - සමාහාර ඉල්ලුම

Ø  The total demand for goods and services within a particular market.

Ø  AD describes the relationship between everything bought within a country and prices.

Ø  AD equals the GDP (Gross Domestic Product)

Ø  AD follows the law of demand

Why is AD so important?

AD tells the quantity of goods and services demanded in an economy at a given price levels. It is important to notice that AD is a schedule because AS the price level changes, the economy of output also changes.

Components of Aggregate Demand

v  Consumption

v  Investments

v  Government Spending

v  Net Exports

v  AD = GDP = C + I + G + NX

Ø  If above these components increase, AD curve shifts to the right.

Ø  AD shows the relationship between real GDP and the price levels.