Definitions
Graphs
Inflation
Short-Run Aggregate Supply
Long-Run Aggregate Supply
100
A period in which nominal wages remain fixed as the price level increases or decreases
What is short run?
100
A curve relating government tax rates and tax revenues and on which a particular tax rate (between 0 and 100 percent) maximizes tax revenues
What is the Laffer Curve?
100
A reduction in the rate of inflation
What is disinflation?
100
It is the nation's natural rate of unemployment
What is 4% ?
100
In the long-run aggregate supply, ______ _____ are fully responsive to changes in price level
What are nominal wages?
200
The rates on extra dollars of income
What is marginal tax rates?
200
This graph shows the relationship between unemployment rate and annual rate of increase in the price level
What is the Phillips Curve?
200
Inflation accompanied by stagnation in the rate of growth of output and an increase in unemployment
What is stagflation?
200
Increased unemployment and and a higher unemployment rate accompany the _______ (incline/decline) in real output
Decline
200
Long-run aggregate supply is represented by a ________ line at the full employment level of real GDP.
What is a vertical line?
300
The period in which nominal wages are fully responsive to previous changes in the price level.
What is long run?
300
A supply curve relevant to a time period in which input prices do not change in response to changes in price level
What is a short-run aggregate supply curve?
300
A view of macroeconomics that emphasizes the role of costs and aggregate supply in explaining inflation, unemployment, and economic growth.
What is Supply-Side Economics?
300
When the price level falls, firms _______ (increase/decrease) production and employment
Decrease
300
The long-run aggregate supply looks at changes in nominal wages as a response to changes in _____ _____
What is price level?
400
Another name for supply-side economists
What is supply-sider?
400
A supply curve associated with a time period in which input prices are fully responsive to changes in the price level
What is a long-run aggregate supply curve?
400
Inflation that arises from factors that increase the cost of production at each price level, shifting the aggregate supply curve leftward and raising the equilibrium price level.
What is cost-push inflation?
400
In the aggregate supply curve, the price level is flexible _________(upwards/downwards/both upwards and downwards)
Both upwards and downwards
400
Nominal wages change by _______ (half/double/the same ) relative amount as changes in price level
The same
500
A sudden, large increase in resource costs that jolt an economy's short-run aggregate supply leftward.
What is an aggregate supply shock?
500
In this model, the equilibrium price level, and the level of real output occur at the intersection of the aggregate demand curve, the short-run aggregate supply curve. and the long-run aggregate supply curve.
What is Equilibrium in the Extended AD-AS Model?
500
Type of inflation that occurs when an increase in aggregate demand pulls up the price level
What is demand-pull inflation?
500
In the short-run aggregate supply curve, firms and workers have established _______ _____ on the expectation that this price level will persist
What are nominal wages?
500
The long-run outcome of a decrease in price level is a ______ (increase/decrease) in nominal wages
Decrease
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