AD/AS
The formula for GDP
What is C + I + G + Xn?
Two examples of expansionary Fiscal Policy
What are an Increase in Govt spending, decrease in taxes?
The range of AS that is horizontal
What is the Keynesian Range?
This is a Phillips Curve (drawn)
Draw
This is the main reason why Barter Systems are inefficient.
What is the Double Coincidence of Wants?
The level of GDP where the economy is at long-run equilibrium.
What is full employment output?
An increase in taxes is an example
What is contractionary fiscal policy?
The economics who said "In the long run we are all dead."
Who is John Maynard Keynes?
This is where the Long Run Phillips Curve is at.
What is the natural rate of unemployment?
The Federal Reserve district are we in.
What is district eleven?
A component that when increased will lead to a rightward shift in LRAS.
What is Investment?
Fiscal Policy systems that don't require a new act from Congress.
What are automatic stabilizers?
This is what happens in the long run after aggregate demand increases, according to Classical Economists
What is a decrease in aggregate supply?
This causes the SRPC to decrease.
An increase in AS.
These are the 3 functions of money.
What are a means of exchange, a unit of account, and a store of value?
These are 3 shifters of Aggregate Supply.
What are resource prices, actions of the government, and productivity?
These are 3 weaknesses to Fiscal Policy
What are Lag, Net Export Effect, Crowding Out, Political Policy, and Deficit Spending
The school of economics focused on individual action, not on government intervention.
The result on the Phillips Curve graph when the economy is in an inflationary gap and the government takes the correct fiscal policy action to stabilize the economy.
A movement along the curve to the right (lower inflation, higher unemployment)
These are the 3 primary methods or means for how the Fed changes the money supply.
What is changing the reserve requirement, changing the discount rate, and open market operations?
These are the PPC, Business Cycle, ADAS, and Phillips Curve Graphs for an economy with an inflationary gap.
Drawing on board.
3 examples of non-discretionary Fiscal Policy.
What are Unemployment, Welfare (Medicaid, Food Stamps, etc), Progressive Taxes
This a fully labeled ADAS curve, assuming wages are sticky.
Drawn
A shift potentially caused by the government giving out checks to people who have lost their jobs due to covid.
What is an increase in the LRPC?
These are the 3 things that happen sequentially when the Fed increases the money supply to affect aggregate demand.
What is a decrease in interest rates, an increase in investment, and an increase in AD.