Graphs & Shifts
This curve shifts to the right when there is a significant increase in labor productivity or a technological advancement.
SRAS
This type of unemployment includes qualified workers with transferable skills who are temporarily between jobs or recent graduates.
Frictional Unemployment
Equation to find total change in GDP of a deposit in a bank
1 / MPS
Congressional Actions
Fiscal Policy
This component increases when U.S. goods become cheaper for foreigners
Net Exports
On an AD-AS graph, this vertical line represents the economy’s maximum sustainable capacity and full-employment output.
LRAS
This indicator is defined as the dollar value of all final goods and services produced within a country's borders in one year.
GDP
If the Fed wants to increase the money supply, it will: Lower Discount Rate, Lower Reserve Ratio, or
Buy Bonds
Things that manage the economy without involving Congress
Automatic Stabilizers (Non-Discretionary Fiscal Policy)
When foreign consumers start really liking goods from the U.S. this happens
Increase in Demand and USD Appreciates
If the Aggregate Supply curve shifts to the left, this related graph curve will shift to the right to show higher inflation and unemployment.
Short-Run Philips Curve
What is the base year's CPI
100
This is the interest rate that the Fed charges banks to borrow money
Discount Rate
Also known as the Brake that the Fed uses to cool down the economy
Contractionary Monetary Policy
If U.S. Interest Rates Rise compared to the rest of the world, what happens to U.S. Currency
Appreciates
In the Money Market graph, this curve is vertical because it is set and controlled independently by the central bank.
Money Supply
What is a 6-month period of GDP decline (marked by contraction) called?
Recession
Increase in Price Level or Income will shift this curve right?
Money Demand
This phenomenon occurs when government deficit spending drives up real interest rates and reduces private sector investment.
Crowding Out Effect
What happens to U.S Dollar compared to British Pound when U.S. Incomes Increase
USD Depreciates (Higher Income = Higher Disposable Income = Increased Imports)
If an economy is in an inflationary gap, which curve will shift left due to sticky wages and resource prices becoming flexible in the long-run
SRAS
When the economy is at full employment output, the actual unemployment rate is equal to this specific rate.
Natural Rate of Unemployment
How much less is the Tax Multiplier than the Spending Multiplier?
One less
nonpartisan central bank of the United States tasked with regulating banks and the money supply.
Federal Reserve or the Fed
If a major trading partner (like China) has a severe recession, this will be the immediate impact on the domestic country's AD curve.
Shifts Left