Keynesian Equilibrium
In the Keynesian Cross model, what is the point where planned spending equals total national income and there are no unintended changes in inventories?
Equilibrium
The total quantity of goods and services demanded at different price levels throughout the entire economy.
Aggregate demand
What are government attempts to stabilize the economy through taxation and expenditure policies collectively known as?
Fiscal policy
What is the institution responsible for controlling monetary policy and regulating the banking system in most economies called?
central bank
The increase in output generated from technological innovation rather than additional labor or capital is known as this type of growth.
Intensive growth
What happens when planned spending is too low to purchase the economy’s full-employment level of output, creating downward pressure on production and employment?
Recessionary Gap
The long-run aggregate supply curve becomes vertical because prices and wages are assumed to be fully what?
Flexible
A decrease in personal income taxes generally increases households’ disposable income and stimulates which spending component?
Consumption
When a central bank purchases government securities from financial institutions, which economy-wide variable increases?
Money supply
Investments in worker education, training, and skill development collectively form this type of capital.
Human capital
What is the name of the 45° line in the Keynesian model that shows all points where total income equals total expenditure?
Keynesian Cross
Which macroeconomic curve shifts leftward when a sudden increase in oil prices raises firms’ production costs and decreases real GDP?
SRAS curve
What occurs when government expenditures continuously exceed tax revenues during a fiscal year?
Deficit
What is the legally required percentage of deposits that commercial banks must retain rather than lend called?
Reserve ratio
In growth theory, improvements in technology shift which relationship upward between inputs and output?
Production function
The numerical coefficient showing how much equilibrium GDP changes following a change in autonomous spending is called what?
multipler
What is the combination of real GDP and price level determined by the intersection of Aggregate Demand (AD) and Aggregate Supply (AS) curves called?
Equilibrium
What is the phenomenon called when expansionary government borrowing raises interest rates and reduces private investment?
crowding-out
What is a sustained increase in the overall average price level across an economy over time called?
Inflation
The portion of economic growth unexplained by increases in labor and capital inputs is commonly referred to as this residual.
Solow residual
In disequilibrium, firms respond to unplanned inventory accumulation primarily by adjusting this macroeconomic variable.
Output
What is the economic condition called when an economy experiences simultaneously high inflation, low economic growth, and high unemployment?
Macroeconomic stagflation
What are tax revenues and welfare payments that automatically change with economic activity without new legislation called?
Stabilizers
What is the theoretical maximum expansion of the money supply generated from an initial bank deposit called?
Multiplier
In macroeconomic theory, what is the level of real GDP produced when labor and capital are utilized efficiently without generating accelerating inflation called?
Natural output