Macroeconomics Chapters 26 And 27

Front 1

Nominal Wage

Back 1

the wage measured in current doallars; the dollar amount on a paycheck

Front 2

real wage

Back 2

the wage in dollars of constant purchasing power; the wage measured in terms of the quantity of goods and services it will buy

Front 3

potential output

Back 3

the economy's maximum sustainable output, given the supply of resourses, technology and production incentives; the output level when there are no surproses abotu the price level

Front 4

natural rate of unemployment

Back 4

the unemployment rate when the economy produces its potential output

Front 5

short run

Back 5

a period during whcih some resource prices especially those for labor are fixed by explicity or implicit agreements

Front 6

short run aggregate supply curve

Back 6

a curve that shows a direct realtionship between the price level and real GDP supplied in the short run, other things constant

Front 7

short run equilibrium

Back 7

the price level and real GDP that occur when the aggregate demand curve intersects the short run aggregate supply curve

Front 8

expansionary gap

Back 8

the amount by whcih ourtpu in the short run exceeds the conomy's potential output

Front 9

long run

Back 9

a period during whcih wage contracts and resource price agreements can be renegotiated; thare are no surprises about eh economy's actual price level

Front 10

long run equilibrium

Back 10

the price level and real GDP that occurs when the actual price level equals the expedt price level real GDP supplied equals potential output, and real GDP supplied equals real GDP demandedq

Front 11

contractonary gap

Back 11

the amount by which acutla output in the short run falls short f the economy's potential output

Front 12

long run aggregate supply curve

Back 12

a vertical line at the conomy's potential aoutput aggregate supply when there are no surpises about the price level and all resource contracts cna be renegotiated

Front 13

coordination failure

Back 13

a situation in which workers adn employers fail to achieve and outcome that all would prefer

Front 14

supply shocks

Back 14

unexpected events that affect the aggregate supply, sometimes only emporarily

Front 15

beneficial supply shocks

Back 15

unexpected events that icnresase aggregate supply sometiems only temporarily

Front 16

adverse supply shocks

Back 16

unexpected events that r4educe aggreagae supply, sometiems only temporarily

Front 17

hysteresis

Back 17

the theory that the natural rate of unemployment depends in part on the recent history of unemployment; high unemployment rates increase tha ntural rate of unemployment