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15 Cards in this Set

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who are the 4 players in an open macroeconomic economy?
Households, businesses, government, and foreigners
what makes up aggregate demand?
consumption expenditure, investment expenditure, governemtn expenditure (all on final goods), and net exports
what determines aggregate demand?
disposable income, but to a lesser extent wealth and real interest rates play a minor role as well
what determins the current account?
the real exchange rate is the biggest, but also disposable income
what is aggregate supply?
the total output of an economy
Intermediate Inputs
Parts and materials that are incorporated into a final good.
Aggregate Demand Curve
The graphical relationship between the total quantity demanded of goods and services and the price level.
Aggregate Supply Curve
The graphical relationship between the nation’s output and the price level.
what are the two types of macroeconomic policies?
fiscal and monetary
Fiscal policy is...
Measures or policies relating to taxation and government expenditures.
Multiplier Effect
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.
Monetary Policy
Policies relating to money supply and interest rate.
Open Market Operations
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.
who implements monetary policy in the united states?
the US central bank does!
who implements fiscal policy?
much more complicated but congress must pass laws