Vocabulary
aggregate demand
What is the demand for all finished goods and services at various price levels in a given period of time?
Aggregate demand formula
What is AD= C + I + G + (X-M)?
if something other than price decreases SRAS, the SRAS curve shifts ____
What is left?
inverse, decreasing curve
What is the aggregate demand curve?
AD VS Demand
What is total amount of all goods and services, quantity consumers are willing and able to purchase at each level VS demand for goods in a certain market?
short run aggregate supply
What is the total output that exists in a period of time when production costs can be fixed?
If something other than price levels increases spending, then the AD curve shifts _____.
What is right?
resources, action, productivity, inflationary
What are the shifters of SRAS?
direct, increasing curve
What is the supply curve?
AS VS Supply
What is the total supply of goods and services available to a particular market from produces vs amount producers provide in a market.
long-run aggregate supply
What is the number of goods and services the economy is capable of producing (full employment)?
Scenario: Interest rates increase causing a decrease in capital stock.
What is the shifter investment and decrease in the short run?
Scenario: A trade dispute causes oil prices to double.
What is supply shifts left?
consumer spending, business investment spending, government policies, net exports
What is shifters of AD
Difference between appreciate and depreciate
What is a rise in value and a lower in value?
nominal wages
What are dollar amounts paid to employees that are not easily changed
Scenario: Incomes increase for US trading Partners Mexico and the UK
What is a shifter of exports and increase in the short run.
Scenario: There is an increase in consumer spending.
What is no shifter and no change in SRAS?
Government raises taxes
What is SRAS shifts to the right?
interest rate effect VS exchange rate effect
What is impact that changes in borrowing power has on AD and aggregate prices vs a currency that has increased in value?
interest rate effect
What is the impact that changes in borrowing power has on aggregate demand and aggregate prices?
Scenario: The price levels increases by 15%
What is the shifter no change and no increase or decrease in the short run?
What is Real GDP decreasing
Scenario: Workers expect higher inflation and demand higher wages.
What is shifters inflationary and resources and a decrease in SRAS?
LRAS curve
What is the relationship between aggregate price level and the quantity of aggregate output?
Wealth effect
What happens to consumer spending when aggregate price level changes, AD slopes down?