The Economics Of Money, Banking, & Financial Markets - Ch. 23

Front 1

aggregate demand curve

Back 1

The relationship between the quantity of aggregate output demanded and the price level.

Front 2

aggregate supply curve

Back 2

The relationship between the quantity of aggregate output demanded and the price level

Front 3

"animal spirits"

Back 3

Waves of optimism and pessimism that affect business and consumer spending

Front 4

consumer expenditure

Back 4

Total demand for consumer goods and services

Front 5

demand shocks

Back 5

The term used to describe the six factors that shift aggregate demand

Front 6

equation of exchange

Back 6

The equation M x V = P x Y, which relates nominal income to the money supply

Front 7

government spending

Back 7

Spending by all levels of government on goods and services

Front 8

hysteresis

Back 8

The theory that departures from full employment levels result from past high unemployment

Front 9

Keynesians

Back 9

Followers of Keynes who see the need for active government policy to restore the economy to full employment

Front 10

monetarists

Back 10

Followers of Milton Friedman who advocate the use of a rule whereby the monetary base grows at a constant rate

Front 11

natural rate of input

Back 11

The level of aggregate output produced at the natural rate of unemployment

Front 12

natural rate of unemployment

Back 12

The rate of unemployment consistent with full employment at which the demand for labor equals the supply of labor

Front 13

net exports

Back 13

Net foreign spending on domestic goods and services, equal to exports minus imports

Front 14

planned investment spending

Back 14

Total planned spending by business firms on new machines, factories, and other inputs to production plus planned spending on new homes

Front 15

quantity theory of money

Back 15

The theory that nominal income is determined solely by changes in the quantity of money

Front 16

real business cycle theory

Back 16

A theory that views real shocks to tastes and technology as the major driving force behind short-run fluctuations in the business cycle

Front 17

self-correcting mechanism

Back 17

A characteristic of the economy that causes output to return to the natural rate level of output regardless of where output is initially

Front 18

supply shocks

Back 18

Changes in technology and the supply of raw materials

Front 19

velocity of money

Back 19

The average number of times per year that dollar is spend on final goods and services