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9 Cards in this Set
- Front
- Back
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Aggregate demand (AD) curve |
A curve that shows the relationship between the price level and the quantity of real GDP demanded by households, firms, and the government. |
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Aggregate demand and aggregate supply model |
A model that explains short run fluctuations in real GDP and the price level |
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Fiscal Policy |
Changes in federal taxes and purchases that are intended to achieve macroeconomic policy objectives. |
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Long run aggregate supply LRAS curve |
A curve that shows the relationship in the long run between the price level and the quantity of real GDP supplied. |
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Menu Costs |
The costs to firms of changing prices. |
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Monetary policy
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the actions the Federal Reserve takes to manage the money supply and interest rates to pursue macroeconomics policy objectives.
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Short-Run aggregate supply SRAS curve
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A curve that shows the relationship in the short run between the price level and the quantity of real GDP supplied by firms.
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Stagflation
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A combination of inflation and recession, usually resulting from a supply shock.
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Supply Shock
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An unexpected event that causes the short-run aggregate supply is greater than the quantity demanded.
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