Chapter 13 Quiz

aggregate demand

the total demand for final goods and services in an economy at a given time

aggregate supply

the total supply of goods and services available to a particular market from producers.p

wealth

the net value of one's accumulated assets

wealth effect

the change in the quantity of aggregate demand that results from wealth changes due to price-level changes

interest rate effect

occurs when a change in the price level leads to a change in interest rates and, therefore, in the quantity of aggregate demand

international trade effect

occurs when a change in the price level leads to a change in the quantity of net exports demanded

long run

a period of time sufficient for all prices to adjust

short run

period of time in which some prices have not yet adjusted

supply shocks

surprise events that change a firm's production costs

price cap

a form of economic regulation that establishes an upper limit on the prices that a utility provider can charge.