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9 Cards in this Set
- Front
- Back
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Short run
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A period in which nominal wages and other imput prices do not change in response to a change in the price level.
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Long run
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A period sufficiently long for nominal wages and other imput prices to change in response to a change in the nations price level.
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Phillips Curve
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A curve showing the relationship between the unemployment rate and the annual rate of increase in the price level.
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stagflation
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Inflation accompied by stagnation in the rate of growth of outputand an increase in unemployment in the economy. Simultaneous increase in the inflation rate and the unemployment rate.
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aggregate supply shocks
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Sudden large changes in resource cost that shift an economys aggregate supply curve.
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long run vertical phillips curve
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The phillips curve after all nominal wages have adjusted to changes in the rate of inflation. A line emanating straight upward at the economys natural rate of unemployment.
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disinflation
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A reduction in the rate of inflation.
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supply side economics
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A view of macroeconomics that emphasizes the role of costs and aggregate supply in explainging inflationl unemplyment and economic growth.
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laffer curve
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A curve relating government tax rates and tax revenues and on which a paticuar tax rate (between 0 and 100%) maximizes tax revenue.
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