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15 Cards in this Set
- Front
- Back
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who are the 4 players in an open macroeconomic economy?
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Households, businesses, government, and foreigners
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what makes up aggregate demand?
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consumption expenditure, investment expenditure, governemtn expenditure (all on final goods), and net exports
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what determines aggregate demand?
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disposable income, but to a lesser extent wealth and real interest rates play a minor role as well
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what determins the current account?
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the real exchange rate is the biggest, but also disposable income
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what is aggregate supply?
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the total output of an economy
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Intermediate Inputs
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Parts and materials that are incorporated into a final good.
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Aggregate Demand Curve
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The graphical relationship between the total quantity demanded of goods and services and the price level.
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Aggregate Supply Curve
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The graphical relationship between the nation’s output and the price level.
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what are the two types of macroeconomic policies?
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fiscal and monetary
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Fiscal policy is...
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Measures or policies relating to taxation and government expenditures.
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Multiplier Effect
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A change in spending has an impact on national product that is ultimately larger than the initial magnitude of spending change. The total impact is a multiple of the initial change.
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Monetary Policy
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Policies relating to money supply and interest rate.
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Open Market Operations
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The principal measure of monetary policy, consisting of the purchase and sale of treasury bills, notes and bonds designed to influence bank reserves and interest rates.
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who implements monetary policy in the united states?
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the US central bank does!
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who implements fiscal policy?
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much more complicated but congress must pass laws
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