Flashcards
Aggregate Supply and Demand
Cards in this deck (7)
- 1Aggregate Demand Curveshows quantity of goods that all economic agents want to buy at each price level
all four components of GDP - 2Aggregate Supply Curvequantity of goods and services firms choose to sell at each price level
- 3Slope of the Aggregate Demand CurveConsumption: low price level causes more consumption
Investment: low price level reduces interest rate, more spending on investment goods
Net Exports: low price level, exchange rate depreciates, more exports - 4Long Run Aggregate Supply Curvevertical natural rate of output, may shift due to labour, capital, natural resources, technology
- 5Short Run Aggregate Supply Curveoutput deviates from natural rate when price level deviates, time to adjust
- 6Contraction in Aggregate Demandoutput falls in short run, short run AS will adjust, and output will return to natural rate at lower price level
- 7Adverse Shift in Aggregate Supplyprice level rises, unemployment up, output down
stagflation caused, output down but prices up
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- 1000 Intro to Economics (Aggregate Supply and Demand ) Flashcards on Aggregate Supply and Demand, created by Megan Clermont on 15/04/2016.
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- Megan Clermont
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