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11 Cards in this Set
- Front
- Back
Aggregate Demand Curve |
Shows the relationship between the aggregate price level and the quantity of aggregate output demanded by households, businesses, the government, and the rest of the world |
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Wealth affect of a change to the aggregate price level |
Is the change in the consumer spending caused by the altered purchasing power of consumer assets |
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Interest rate effect of a change in the aggregate price level |
Is the change in investment and consumer spending caused by altered interest rates that result from changes in the demand for money |
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Fiscal policy |
Is the user of taxes, government transfers, or government purchases of goods and services to stabilize the economy |
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Monetary policy |
Is the central banks use of changes in the quantity of money or the interest rate to stabilize the economy |
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Aggregate supply curve |
Shows the relationship between the aggregate price level and the quantity of aggregate output supposed supplied in the economy |
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Nominal wages |
Is the dollar amount of the wage paid |
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Sticky wages |
Are nominal wages that are slow to fall even in the face of high unemployment and slow to rise even in the face of labor shortages |
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Short-run aggregate supply curve |
Shows the relationship between the aggregate price level and the quantity of aggregate output supposed that exists in the short run, the time period when many production costs can be taken as fixed |
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Long-run aggregate supply curve |
Shows the relationship between the aggregate price level and quantity of aggregate output supplied that would exist if all prices including nominal wages were fully flexible |
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Potential output |
Is the level of real GDP the economy would produce if all prices, including nominal wages, were fully flexible |