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9 Cards in this Set
- Front
- Back
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Short run |
A period in which nominal wages do not respond to price-level changes |
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Long run |
A period in which nomial wages are fully responsive to previous changes in the price level |
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Phillips Curve |
Demonstrates the short-run tradeoff between the rate of inflation and the rate of unemployment |
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Stagflation |
When inflation and unemployment continue to rise simultaneously (when the economy doesn't grow) |
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Aggregated supply shocks |
Sudden, large increases in resource costs that jolt an economy's short-run AS curve leftward |
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Long-run vertical Phillips Curve |
Rate of unemployment doesn't change no matter the level of rate of inflation |
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Disinflation |
Reductions in inflation rate from year to year |
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Supply-side economics |
Stress that changes in AS are an active force in determining the levels of inflation, unemployment, and economic growth |
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Laffer Curve |
Relating government tax rates and tax revenues and on a particular tax rate maximizes tax revenues |
