AP Macroeconomics Unit 2:

long run

If consumer spending increases, what will happen in the long run?

If consumer spending increases, what will happen in the long run?

If consumer spending increases, what will happen with price level and output in the long run?

If consumer spending decreases, what will happen with price level and output in the long run?

capital stock

fiscal policy

monetary policy

consumer spending

direcretionary fiscal policy

non-discretionary fiscal policy

FP time lags:

recognition lag

administrative lag

operational lag

contractionary fiscal policy (BRAKE)

expansionary fiscal policy

Phillips curve

short run phillips curve

long run phillips curve

AD Phllips Curve

AS Phillips Curve

loanable funds market

shows the supply and emand of loans and shows the equilibrium and real interest rate

loanable funds demand

inverse relationship between real interest rate and qy=uanity loans demanded

loanable funds supply

direct relationship between real interest rate and quantity loans demanded

saving and supply

saving is what makes lending possible so the supply of loanable funds is the amount of money saved

private saving

the amount that household/firms save instead of consume

public saving

the amount that the government saves instead of spends

national savings

private + public savings

foreigners and supply

lends so the supply of loanable funds also depends on the amount that enters/leaves the country

capital inflow

amount of money entering the country

capital outflow

amount of money leaving the country

net capital inflow

inflow - outflow

borrowing

demand of loanable funds

private investment

borrowing by bussines/frms and custmers

government borrowing

deficit spending when governemnt spending is greater than tax revenue

demand shifters (loanable funds)

supply shifters (loanable funds)