The ________ shifts the AD to the left, and creates a new equilibrium point.
New cards
2
Business cycle
Is the pattern experienced by the economy.
New cards
3
Short- run Aggregate Supply
Before wages and other resource prices have adjusted to macroeconomic conditions.
New cards
4
price level
When ________ rises, aggregate demand decreases and vise versa.
New cards
5
wealth effect
When households begin to spend more and gain less, this decreases aggregate demand.
New cards
6
Stagflation
Is consistent high inflation paired with high unemployment and stagnant demand in a country’s economy.
New cards
7
Consumer Confidence
is a statistical measure of consumers feelings about current and future economic problems, and is used as indicator of the overall state of the economy.
New cards
8
Peak
end of expansion and the beginning of contraction.
New cards
9
Trough
The end of contraction and the beginning of expansion.
New cards
10
Contraction
A sustained decline in economic activity.
New cards
11
Equilibrium Quantity
The amount of output that results in no shortage or surplus; the amount of goods and services bought and sold in the economy.
New cards
12
LRAS
is vertical due to the amount supplied in the long run which does not depend on the price level.
New cards
13
Economic growth
Is an increase in the production of goods and services in an economy.
New cards
14
Unemployment
since less production means less demand for labor.
New cards
15
Supply shock
An unexpected change in short- run or long- run aggregate supply.
New cards
16
Aggregate demand
Is affected by many factors, however, it can all be categorized in groups.
New cards
17
Foreign Purchaser effect
When price level rises, on reason aggregate demand declines is due to foreign demand decreasing.
New cards
18
Expansion
A sustained improvement in economic activity.
New cards
19
aggregate supply
In the short run, ________ is unaffected as a change in price level is not matched by a change in input costs.
New cards
20
LRAS
An increase in resources or technological advances shifts ________ to the right, while a reduction in resources or a decline in technological productivity shifts ________ to the left.
New cards
21
Aggregate demand
Is the amount of goods and services demanded by households, businesses, governments, and foreigners.
New cards
22
Long- Run Aggregate Supply
After wages and other resource prices have adjusted to macroeconomic conditions.
New cards
23
price level
A rise in ________ leads to an increase in aggregate supply.
New cards
24
Aggregate Supply
is the amount of all goods and services brought to market by all producers.
New cards
25
Aggregate supply
Is measured by dollars instead of value.
New cards
26
Business cycle
is the pattern experienced by the economy
New cards
27
Contraction
a sustained decline in economic activity
New cards
28
Expansion
A sustained improvement in economic activity
New cards
29
Peak
end of expansion and the beginning of contraction
New cards
30
Trough
the end of contraction and the beginning of expansion
New cards
31
Aggregate Supply
is the amount of all goods and services brought to market by all producers
New cards
32
Long-Run Aggregate Supply
aggregate supply after wages and other resource prices have adjusted to macroeconomic conditions
New cards
33
Two shifters of LRAS
Technological advances and increase/decrease in resources
New cards
34
Short-run Aggregate Supply
aggregate supply before wages and other resource prices have adjusted to macroeconomic conditions
New cards
35
Aggregate demand
is the amount of goods and services demanded by households, businesses, governments, and foreigners
New cards
36
Foreign Purchaser effect
When price level rises, on reason aggregate demand declines is due to foreign demand decreasing
New cards
37
The wealth effect
When households begin to spend more and gain less, this decreases aggregate demand
New cards
38
Consumer Confidence
is a statistical measure of consumers feelings about current and future economic problems, and is used as indicator of the overall state of the economy
New cards
39
Foreign purchases effect
foreigners demand less when domestic prices rise because their income have not risen in tandem, and domestic consumers prefer more imports since domestic prices are up2
New cards
40
Wealth effect
financial wealth is destroyed when prices rise, this causes consumers to save more and spend less
New cards
41
Equilibrium Price Level
The price level that equates aggregate supply and aggregate demand; the average level of prices in the economy
New cards
42
Equilibrium Quantity
the amount of output that results in no shortage or surplus; the amount of goods and services bought and sold in the economy
New cards
43
Stagflation
is consistent high inflation paired with high unemployment and stagnant demand in a countrys economy
New cards
44
Supply shock
an unexpected change in short-run or long-run aggregate supply
New cards
45
Economic growth
is an increase in the production of goods and services in an economy
New cards
46
Increasing human capital
when labor becomes better triand and more effective
Studied by 1 person
