Aggregate Supply & Demand
This curve shows the relationship between the overall price level and the quantity of output firms are willing to supply.
What is SRAS?
This is the type of unemployment that occurs naturally in a healthy economy as people are between jobs or searching for better ones.
What is frictional?
This type of demand exists when the quantity demanded for a good is insensitive to changes in price of that good.
What is inelastic demand?
For a firm in a perfectly competitive market, this value is equal to the price the firm charges.
What is MR = D = AR = P?
What is Gross Domestic Product?
A sudden, temporary increase in the cost of a key input, like oil, will cause this to happen to price level and output in the short-run.
What is increase PL & decrease output?
This type of unemployment exists when the current unemployment rate is greater than the natural rate of unemployment.
What is cyclical?
If a product has a Price Elasticity of Demand (PED) value greater than 1, we say the demand for that product is this.
What is elastic?
For a monopoly, price is this with regards to Average Total Cost which enables long-run economic profit.
What is greater than ATC?
This causes the investment portion of GDP to decrease (think $ Mkt and LF Mkt).
What is an increase in interest rates?
This curve is independent of the price level and shows the full-level of employment.
What is LRAS?
When a person's skills become obsolete due to technological change, such as a video store clerk, they are experiencing this type of unemployment.
What is structural?
When the Cross-Price Elasticity of Demand is a negative value, the two goods are considered to be this.
What are complements?
This occurs in a perfectly competitive market when individual firms are taking economic losses in the short-run.
What is firms exit the market?
This is one shortcoming of how economists measure GDP or the CPI.
What is - GDP (spouse activities, leisure, pollution), CPI - (substitution, quality changes)?
The real wealth effect, the interest rate effect, and the exchange rate effect all explain the downward slope of this curve.
What is the AD curve?
This is the equation for the Labor Force Participation Rate.
What is Labor Force / Adult Population?
If a price decrease increases the firm's Total Revenue, the demand for the good is this.
What is elastic?
This is the term for the area on a monopoly graph that represents the loss of total surplus (consumer + producer) due to the monopolist restricting output.
What is Deadweight Loss?
This portion of GDP is affected when your grandmother receives a social security check from the government.
What is N/A? - Not counted
The type of policy taken to stimulate the economy out of a recessionary gap.
What is expansionary fiscal or monetary policy?
This is the outcome when there is an increase in the minimum wage (a binding price floor).
What is a surplus of labor?
It is this type of good when income elasticity is greater than 0.
Both the perfectly competitive firm and the monopolist maximize profit by producing the quantity where this equals Marginal Revenue (MR).
What is marginal cost?
This it the inflation rate when the CPI changes from 100 to 108 between 2024 and 2025.
What is 8%?