Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
12 Cards in this Set
- Front
- Back
AD-AS Model |
The aggregate supply curve and the aggregate demand curve are used together to analyze economic fluctuations |
|
Short-run Macroeconomic equilibrium |
When the quantity of aggregate output supplied is equal to the quantity demanded |
|
Short-run equilibrium aggregate price level |
The aggregate price level in the short run Macroeconomic equilibrium |
|
Short run equilibrium aggregate output |
The quantity of aggregate output produced in the short run Macroeconomic equilibrium |
|
Supply shock |
The event that's shifts the short run aggregate supply curve |
|
Demand shock |
An event that shifts the aggregate demand curve |
|
Stagflation |
The combination of inflation and stagnating (or falling) aggregate output |
|
Long run Macroeconomic equilibrium |
When the point of short run Macroeconomic equilibrium is on the long run aggregate supply curve |
|
Recessionary gap |
Occurs when aggregate output is below the potential output |
|
Inflationary gap |
Occurs when aggregate output is above potential output |
|
Output gap |
The percentage difference between actual demand affect aggregate output in the show run, but not in the long run |
|
Stabilization policy |
Is the user of government policy to reduce severity of recessions and rein in excessively strong expansions |