MacroEcon

Price of everything will rise/fall and wages will be the last thing to change= sticky wages

Aggregate supply curve(short run)= upward sloping= Aggravate price rise then real GDP rise

Shift along the ASC= fall in prices/rise in prices

Shift of the ASC=changes in expected inflation, changes in commodity prices, changes in nominal wages, and changes in productivity

High inflation= sell everything= Short run agregate supply increases

Low inflation= keep everything to sell later= short run agregate supply decreases

In the long run wages are not sticky= long run aggregate supply curve is vertical

Potential output = the max you are capable of making in an economy

actual output can be overused causing the actual aggregate output to be above the potential output

LRAS is where AD and SRAS meet= otherwise known as the equilibrium

If AD increases then an inflationary gap happens

If AD decreases then an reccesionary gap happens

The Labor market is the principle means in which the economy gets itself back into long run equilibrium

Fiscal policy is very good when solving demand side phenominom but is not good to solve supply side phenominom

Positive supply shock= means you make more for less mon

Negative supply shock= means you make less for more money