Flashcards
ECON Chap 13- Aggregate Demand & Aggregate Supply
Cards in this deck (12)
- 1Monetary PolicyThe actions the Federal reserve takes to manage the money supply and interest rates
- 2Fiscal PolicyChanges in federal taxes & purchases
- 3In the long run, the level of real GDP...is determine by the # of workers, level of technology and the capital stock
-Not affected by price level
-It is vertical, at the level of potential/full employment GDP - 4Prices of final goods & services rise=Price of inputs rise more slowly
- 5Some firms are slow to adjust their prices when the price level rises or fallsE
- 6Contracts make some wages & prices "sticky"As they do not respond quickly to changes in demand
- 7Firms are often to slow to adjustwages
- 8Menu costsWhen it costs money to change price (new printed catalog hassle)
- 9SRAS SHIFT-Factors of production: Increase=More production
Decrease= Decrease SRAS
-Improvements in technology= More production
-Expected future prices:
Increase=SRAS shift left
Decrease= SRAS shift right - 10Supply ShockUnexpected event that causes SRAS to shift
Price Increase= Decrease SRAS
Price Decrease= Increase SRAS - 11StagflationA combination of inflation and recession, usually resulting from a supply shock
- 12Monetary Growth Rule (Monetarism)A plan for increasing the quantity of money at a fixed rate that does not respond to changes in economic conditions
Information
- Description
- Flashcards on ECON Chap 13- Aggregate Demand & Aggregate Supply, created by carlfbdeleon on 11/12/2013.
- Created by
- carlfbdeleon
- Views
- 20
- Rating