GDP
This type of GDP adjusts for inflation.
Real GDP
The four components of aggregate demand.
C + I + G + (X − M)
This index is most commonly used to measure inflation.
CPI
The unemployment that occurs when workers are between jobs.
Frictional unemployment
Increasing government spending to stimulate growth is this type of fiscal policy.
Expansionary fiscal policy
When real GDP increases over time, this is occurring.
Economic growth
A decrease in interest rates will shift AD in this direction.
Right
Inflation caused by increases in production costs.
Cost-push inflation
Unemployment caused by a mismatch of skills in the labor market. A permanent fall in demand for a type of worker
Structural unemployment
Raising interest rates is an example of this type of monetary policy.
Contractionary monetary policy
A baker buys eggs, sugar, flour, and butter to make cakes, which are then sold to customers. Which parts of this process are counted in GDP
The cake
An increase in oil prices will shift SRAS in this direction.
Left
Inflation resulting from excessive aggregate demand.
Demand-pull inflation
Unemployment caused by downturns in the business cycle.
Cyclical unemployment
Cutting taxes shifts this curve to the right.
Aggregate demand
This measure includes GDP plus net income earned from abroad by residents and firms.
Gross National Income (GNI)
The vertical portion of LRAS represents this concept.
Full employment / potential output
Sustained decreases in the general price level are known as this.
Deflation
The formula for calculating the unemployment rate.
(Unemployed ÷ Labor force) × 100
If economic growth is slowing and unemployment is rising the central bank will use this monetary policy tool - be specific
Lower interest rates
This method calculates GDP by adding spending in consumption, investment, government spending, and net exports.
What is the Expenditure approach
Improvements in the ________ or _______ of the Factors of Production cause LRAS to increase
Quantity or Quality
A fall in the rate of inflation, ie the inflation rate falls from 3% to 2%
Disinflation
When someone is overqualified for the job they have or working less hours than they want to.
Underemployment
Policies designed to increase productivity and shift LRAS right.
Supply-side policies