The imaginary country of Harris Island has the aggregate supply and aggregate demand curves as Table 24.3 shows. Price Level AD AS 100 700 200 120 600 325 140 500 500 160 400 570 180 300 620 Table 24.3 Price Level: AD/AS a. Plot the AD/AS diagram. Identify the equilibrium. b. Would you expect unemployment in this economy to be relatively high or low? c. Would you expect concern about inflation in this economy to be relatively high or low? d. Imagine that consumers begin to lose confidence about the state of the economy, and so AD becomes lower by 275 at every price level. Identify the new aggregate equilibrium. e. How will the shift in AD affect the original output, price level, and employment?
Topic 2: Managerial Decision Making Process Decision Making is defined as dynamic, covers a span of time, continuous, direct and control the nature, degree, and pace. Steps of Decision Making is the following: 1. Formulation of the Problem 2. Search for Alternatives 3. Analysis of Alternatives 4. Selection of Alternatives 5. Action 6. Evaluation Take Corrective Actions as Necessary 1. Reorder our evaluation 2. Reschedule your work flow 3. Reassign your personnel 4. Renew the search/new alternatives 5. Revise objective (last resort) Objectives constitute the foundations for rational decision making (must set goals). Attainment is the ultimate measure of decision success