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8 Cards in this Set
- Front
- Back
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When AD increases and SRAS decrease proportionally, what will happen to price and real GDP |
Real GDP will not change and price will increase |
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Effect of positive supply shock on price and income |
price will decrease and income will increase |
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When price increases what happens to money demand |
It increases |
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What is interest rate effect? And what does it affect? |
It is that when price increases with fixed money supply, spending decreases. And when value of money increases spending decreases. It is why AD is downward. |
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Why is keynesian supply curve horizonal and classical vertical? |
In keynesian no matter the supply, price will remain constant. In classical no matter the price, supply will remain the same. |
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When foreign national income increases, what happens |
Ad increases and ER depreciates |
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Effect of Sticky wage on price and real wage |
It decreases price and increases real wage and decreases output |
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When AD decreases in short run will cause price and gdp to |
Decrease equally |
