Aggregate S&D
What letters are used to represent Aggregate Demand and Aggregate Supply?
AD and AS
What is a business cycle?
a period of swings in economic performance measured by changes in real GDP
what is fiscal policy?
Name a factor that can change aggregate demand?
C + I + G + (X-M)
What is a budget deficit?
When our budget involves higher spending than taxes, so we are in a state of debt
What is aggregate demand and aggregate supply?
AD: total demand for all goods and services in economy
AS: total supply of all goods and services in economy
What are the phases called when an economy is growing and when an economy is declining?
Expansion=growing
Contraction=declining
What aggregate thing do governments manage in order to influence the economy? How does this work?
Aggregate demand (by increasing/decreasing it, production and consumption is influenced which affects GDP, employment, etc)
name a factor that can change aggregate supply?
price of inputs, inputs available, efficiency
What are the three types of budgets in relation to debt?
deficit, surplus and balanced
On an AD or AS graph, what represented on the X-axis?
real GDP
What is the cycle within the phase of expansion in an economy that is responsible for continually fostering the growth of the economy?
prosperity cycle
Name something that can be increased/decreased in expansionary policy and something that can be changed in contractionary phase.
expansionary: decrease taxes, increase government spending
contractionary: raise taxes and decrease spending
Will aggregate demand increase or decrease when the Canadian dollar increases in value?
it will decrease due to our exports being more expensive for other countries
is it better to have a budget deficit or a budget surplus in a recession?
budget surplus, because taxes can afford to be cut and spending can afford to be increased in order to get out of a recession
Do aggregate demand and price level share a direct relationship? How about aggregate supply and price?
AD and price have an inverse relationship. AS and price have a direct relationship.
How much time must pass before a contractionary phase can be deemed as a recession?
6 months (two quarters of a year)
What is the difference between automatic stabilizers and discretionary policy?
Automatic stabilizers - built into economy, automatic
Discretionary - deliberate gov. action, may require legislation, not immediate
Will aggregate supply increase or decrease when the price of inputs (land, labour, capital)?
decrease due to more expense for firms
Given that our debt-GDP ratio is 102% as of 2022, do you think it is mainly a cyclical deficit (due to economic conditions/recession) or a structural deficit (due to gov. spending and taxation)?
although covid-19 may have worsened our debt, it is still a predominantly structural issue, with our country's spending habits setting us back billions.
What is it called when the AD and AS curves intersect at a point on a graph?
the equilibrium level of output and price
In the circular flow of income, what is it called when money is added to the flow and what is it called when money is taken away from the flow? Give an example of each one.
Injections (government spending, investment, exports)
Leakages (taxes, savings and imports)
what constitutes a depression?
a severe recession
Name the three factors that can affect aggregate supply?
price of inputs, inputs available, efficiency
Who's the best basketball player of all time?
Tacko Fall