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5 Cards in this Set
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Absolute advantage
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In international trade theory a country which has an absolute advantage in producing a good is able to produce that good more efficiently (more output per unit of input) than any other country. Also see "comparative advantage."
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Accelerator principle
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In macroeconomic models the accelerator principle relates changes in the rate of real output growth to the level of desired investment spending (investment demand) in the economy. A decline in the rate of real GDP growth, for example, will cause the amount of investment demand to decrease (the investment demand curve will shift to the left).
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Aggregate demand curve
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In macroeconomic theory the aggregate demand curve relates the level of real national income (GDP) demanded (the total quantity of goods and services demanded) to the price level (as measured by the GDP deflator).
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Aggregate expenditure
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In macroeconomic theory aggregate expenditure is the total amount of desired spending by consumers, governments, private investors and foreign buyers (net of spending on imports) at each level of real national income (GDP).
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Aggregate supply curve
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In macroeconomic theory the short run aggregate supply curve relates the total quantity of goods and services supplied and the price level (as measured by the GDP deflator) ceteris paribus. The long run aggregate supply curve is a vertical line at the full employment (capacity output) level of real national income (GDP).
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