AP Macro

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structural unemployment

fired because skills no longer in demand
unemployment rate

percentage of the labor force unemployed at any time
gov't deficit spending is financed by

issuing new bonds
Fed buys securities on open market; what decreases?

interest rates (in the short-run)
factors for economic growth

quantity/quality of resources

amt. of capital goods available

technology
favorable supply shock effects on price level/output
- price: decrease
- output: increase
stagflation

high inflation + high unemployment + stagnant demand
effect of central bank selling securities on open market

decrease money supply

increase interest rates

decrease aggregate demand
federal funds rate

interest rate that banks charge one another for short-term loans