AP Macroeconomics Unit 5: Long-Run Consequences of Stabilization Policies

Chapter 14: Long-Run Consequences of Stabilization Policies

Studied by 4 people

4.0(1)

View linked note

LearnA personalized and smart learning plan

Practice TestTake a test on your terms and definitions

Spaced RepetitionScientifically backed study method

Matching GameHow quick can you match all your cards?

FlashcardsStudy terms and definitions

1 / 14

Earn XP

Description and Tags

AP Macroeconomics

Unit 5: Long-Run Consequences of Stabilization Policies

15 Terms

Rational expectations

theory that people learn to anticipate government policies that influence the economy, making the policies ineffective.

New cards

Phillips curve

shows inverse relationship between inflation rate and unemployment.

New cards

National debt

total amount of money that the federal government owes.

New cards

Deflation

sustained decrease overall price level.

New cards

Budget deficit

federal government spending- tax collections.

New cards

Monetary inflation

when prices increase due to oversupply of currency.

New cards

Inflation

sustained increase to overall price level.

New cards

Monetary inflation

when prices increase due to oversupply of currency

New cards

Phillips curve

shows inverse relationship between inflation rate and unemployment

New cards

Rational expectations

theory that people learn to anticipate government policies that influence the economy, making the policies ineffective

New cards

Inflation

sustained increase to overall price level

New cards

Deflation

sustained decrease overall price level

New cards

National debt

total amount of money that the federal government owes

New cards

Ricardian Equivalency theory

deficit financing no different from tax financing

New cards

Crowding out

decrease in real investment due to higher interest rates from government purchases

New cards