AS/AD
Consumer Spending, Investment Spending, Government Spending, Net exports
What is the QTOM equation?
MV = PQ
Name a phase of the business cycle
Boom, depression, recession, recovery
which of the following represents the flow of money from households to firms?
consumption expenditure
What is the most commonly used measure of economic growth?
Reak gdp
An increase in consumer confidence typically leads to a rightward shift in which curve?
Aggregate Demand
Name all components
Money Supply
Velocity of Circulation
General Price Level
Real Output
Two periods of downward economic growth is defined as a
recession
What are the two main money flows between households and firms?
Consumption expenditure and Income
Define Inflation
An increase in the general price level
Income tax cuts will cause what shifts?
Outward AD curve
What assumptions are put in place in crude QTOM?
V and Q are constant
What phases of the business cycle has high inflation
expansionary or the peak
What do injections refer to?
Money added to the economy through spending
Real GDP
Net Social Welfare
What direction does a curve shift in a contractionary policy?
Inward
3%
Characteristics of an upswing
increase economic activity, low unemployment, rising consumer confidence, higher investment, rising inflation
(need two)
What are three withdrawals in the circular flow model
Savings, taxes and import payments
What is the current rate of inflation?
2.2%
What shifts occur when the OCR increases?
Aggregate supply increases
Aggregate demand decreases
if the money supply increases by 3% and velocity of spending increases by 4% how much will the price level increase and real output decrease by 2%?
5%
What phase of the business cycle is there idle resources which leads to eventual high growth?
Recession
Name all the injections on the circular flow model
Investment, government spending, exports
What is the current OCR?
4.75%