ECO 231 Final
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Government policy that influences the quantity of goods and services that a country imports or exports.
A large and sudden reduction in the demand for assets located in a country.
A period of declining real incomes and rising unemployment.
A severe recession.
Model that most economists use to explain short-run fluctuations in economic activity around its long-run trend.
Model of Aggregate Demand and Aggregate Supply
A curve that shows the quantity of goods and services that households, firms, the government, and customers abroad want to buy at each price level.
A curve that shows the quantity of goods and services that firms choose to produce and sell at each price level.
Production of goods and services that an economy achieves in the long run when unemployment is at its normal rate.
Natural Rate of Output
A period of falling output and rising prices.
Keynes's theory that interest rate adjusts to bring money supply and money demand into balance.
Theory of Liquidity Preference
The setting of the level of government spending and taxation by government policymakers.
The additional shifts in aggregate demand that result when expansionary fiscal policy increases income and thereby increases consumer spending.
The offset in aggregate demand that results when expansionary fiscal policy raises the interest rate and thereby reduces investment spending.
Changes in fiscal policy that stimulate aggregate demand when the economy goes into a recession without policymakers having to take any deliberate action.
ECO 231 Final