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6 Cards in this Set
- Front
- Back
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Say's Law
states what? |
that supply creates its own demand
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what are the beliefs of the classical economists?
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all prices in the economy are perfectly flexible
people have a motive for exchange labor market is based on the idea that markets, if left alone, will automatically move toward equilibrium |
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the aggregate demand curve slopes downward to the right for what reasons?
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the real balance effect
the interest rate effect the international trade effect |
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ceteris paribus, short-run aggregate supply decreases in response to..
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an increase in the price of a major output, such as oil
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adverse supply shocks lead to
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a higher price level
at a lower level of output (real GDP) |
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if aggregate demand increases and short-run aggregate supply is horizontal, the price level ____, real GDP ____, and the unemployment rate ____
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stays the same
increases decreases |
