Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
9 Cards in this Set
- Front
- Back
|
What does the inflation rate do?
|
Measures how fast prices are rising.
|
|
|
What does real gdp measure?
|
The total income of everyone in the economy.
|
|
|
What does the unemployement rate measure?
|
The fraction of the labor force that is out of work.
|
|
|
What are endogenous variables in a model?
|
Variables that a model tries to EXPLAIN.
|
|
|
What are exogenous variables in a model?
|
Variables that a model takes as given.
|
|
|
Assumption that markets are normally in equilibrium, so the price of any good or service is found where the supply and demand curve interset.
|
Market Clearing
|
|
|
What must happen to prices in order for markets to clear continuously?
|
Prices must adjust instantly to changes in supply and demand.
|
|
|
What are prices that adjust quickly to equilibrate supply and demand?
|
Flexible prices
|
|
|
What are prices that adjust sluggishly and therefore do not always equilibriate supply and demand?
|
Sticky prices
|
