Flashcards
AD and AS Equilibrium
Cards in this deck (10)
- 1What does AD =SRAS
- 2What would happen if the government increased corporation taxShift in of AS
Inflationary pressure
Decrease in National output - 3What would happen if consumer incomes rise?Shift out of AD
Inflationary pressure
Increase in National Output - 4What would happen if Business confidence in the UK reducesDecrease in AD
Less inflationary pressure
Decrease in National Output - 5What does the extent in any increase in AD depend on?The level of current output in the economy
- 6At high levels of output what will an increase in AD lead to ?Small increases in growth and large inflationary pressure
- 7At low levels of output what will an increase in AD lead to ?Large increases in growth and little inflationary pressure
- 8How could AD increase beyond full capacity?Ins short run output will rise beyond full capacity but all this will do is push wages up
SRAS curve will shift left- back to LRAS curve - 9What is the overall effect of AD increasing beyond full capacity?Prices rise
- 10What happens when LRAS increases?Potential output of the economy rises
Output goes up and prices go down
Negative output gap
Information
- Description
- A-Level Economics Macrp Flashcards on AD and AS Equilibrium , created by Maya Khangura on 23/02/2016.
- Created by
- Maya Khangura · Feb 2016
- Updated
- May 24, 2016
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