ECON CH16 VOCAB
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(1) In microeconomics, a period of time in which producers are able to change the quantities of some but not all of the resources they employ; a period in which some resources are fixed and some are variable (2) In macroeconomics, a period in which nominal wages and other input prices do not change in response to a change in the price level
(1) In microeconomics, a period of time long enough to enable producers of a product to change the quantities of all the resources they employ; period in which all resources and costs are variable and no resources or costs are fixed (2) In macroeconomics, a period sufficiently long for nominal wages and other input prices to change in response to a change in the nation's price level.
an aggregate supply curve relevant to time period in which input prices (particularly nominal wages) do not change in response to changes in the price level
short run aggregate supply curve
the aggregate supply curve associated with a time period in which input prices (especially nominal wages) are fully responsive to changes in the price level
long-run aggregate supply curve
a curve showing the relationship between the unemployment rate (on the horizontal axis) and the annual rate of increase in the price level (on the vertical axis)
inflation accompanied by stagnation in the rate of growth of output and an increase in unemployment in the economy; simultaneous increases in the price level and the unemployment rate
sudden, large changes in resource costs that shift an economy's aggregate supply curve
aggregate supply shocks
a stable Phillips Curve with the dependable series of unemployment rate inflation rate tradeoffs simply does not exist in the long run
Long run vertical Phillips Curve
a reduction in the rate of inflation
a view of macroeconomics that emphasizes the role of costs and aggregate supply in explaining inflation, unemployment, and economic growth
supply side economics
a curve relating government tax rates and tax revenues and on which a particular tax (between zero and 100 percent) maximizes tax revenues
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