economics 24

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Author:
akoskey
ID:
54834
Filename:
economics 24
Updated:
2010-12-10 14:57:16
Tags:
macroeconomics
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chapter 24
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  1. aggregate demand and aggregate supply model
    a model that explains short-run fluctuations in real GDP and the price level
  2. aggregate demand curve
    a curve that shows the relationship between the price level and the quantity of real GDP demanded by households, firms, and the gvmt
  3. short-run aggregate supply curve
    a curve that shows the relationship in the short run between the price level and the quantity of real GDP supplied by firms
  4. monetary policy
    the actions the Federal Reserve takes to manage the money supply and interest rates to pursue macroeconomic policy objectives
  5. fiscal policy
    changes in federal taxes and purchases that are intended to achieve macroeconomic policy objectives
  6. long-run aggregate supply curve
    a curve that shows the relationship between the price level and the quantity of real GDP supplied
  7. supply shock
    an unexpected event that causes the short-run aggregate supply curve to shift
  8. stagflation
    a combination of inflation and recession, usually resulting from a supply shock
  9. aggregate demand
    • international trade effect
    • wealth effect (real balance)
    • interest rate effect
  10. aggregate supply
    upward slope of sras are 'sticky' costs and prices
  11. causes of shifts in aggregate demand
    • changes in expectations
    • government policies
    • changes in foreign variables
  12. changes in expectations
    • ex. great depression
    • decrease in output=recession
    • decrease in prices=deflation
  13. government policies
    • fiscal (spending and taxing)
    • monetary (money supply and interest rates)
  14. change in foreign variables
    • change in currency exchange rate
    • change in growth of foreign GDP v. US GDP
  15. causes of shifts in SRAS
    • changes in ability to produce
    • sudden change in availability of key resource (supply shock)
    • changes in expectation about future prices
    • correction of past errors in estimating prices
  16. keynes
    the general theory of employment, interest, and money (1936)
  17. GDP gap
    • full employment GDP - actual GDP
    • loss; not producing at full potential

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