In each blank, try to type in the
word that is missing. If you've
typed in the correct word, the
blank will turn green.
If your not sure what answer should be entered, press the space bar and the next missing letter will be displayed. When you are all done, you should look back over all your answers and review the ones in red. These ones in red are the ones which you needed help on. Term: demand (AD)Definition: the qty of all goods & services (Real GDP) at price levels, ceteris paribus; represents spenders Term: aggregate (AD) curveDefinition: downward slope b/c 1. real balance effect (wealth), 2. rate effect, 3. int'l (foreign) trade effect; inverse relationship between the Price level & the qty demanded of Real GDP Term: AD equationDefinition: AD = C+I+G+Nx; left side of = sign, house to house movement, right side of = sign, street to street movement; direct , one side of = sign goes up, so does the other & vice versa Term: real balance Definition: the change in the purchasing power of -denominated assets that results fr a change in the price level; basically when your money means more, you buy more; house to house movement Term: interest rate Definition: the changes in household & spending that is sensitive to changes in the interest rate; inverse relationship, house to house movement Term: international effectDefinition: the changes in foreign sector spending as the PL changes; PL down, PP$ up Qty up (buy more) US & PL up, PP$ down Qty down (buy less) US goods; house to house movement Term: wealthDefinition: the value of a person's assets only Term: wealthDefinition: the value of all owned, both monetary & nonmonetary Term: rateDefinition: the price of one currency in terms of another Term: Definition: an increase in the value of one currency relative to other currencies; PP$ up ->US Ex up US Im down -> Nx up -> AD Term: depreciationDefinition: a decrease in the value of one currency relative to other currencies; PP$ down -> US Ex down US Im up -> Nx down -> AD Term: Definition: the average # of times a dollar is spent to buy goods & services in a yr Term: aggregate Definition: the qty supplied of all goods & services (Real GDP) at price levels, ceteris paribus Term: -Run Aggregate Supply (SRAS) CurveDefinition: a curve that shows the qty supplied of all goods & (Real GDP) at different price levels, ceteris paribus; represents producers, upward sloping b/c sticky wages & worker misperceptions (house to house) Term: SRAS shifters (street to )Definition: wage rates (inverse), of nonlabor inputs (inverse), productivity (direct), supply shocks (beneficial SRAS up, adverse SRAS down) Term: -run equilibriumDefinition: the cond in the economy when the qty demanded of Real GDP = the (short-run) qty supplied of real GDP; where the AD curve and SRAS curve Term: natural real Definition: the real GDP that is at the natural unemployment rate; the real GDP that is produced when the economy is in long-run equilibrium; Qn Term: long-run aggregate supply (LRAS) Definition: a vert line at the level of natural real GDP; represents the output the produces when wages & prices have adjusted to their equilibrium levels when wkrs do not have any relevant misperceptions; the economy's potential Term: long-run Definition: the condition that exists in the economy when wages & prices have adjusted to their (final) level when wkrs don't have any relevant misperceptions; graphically LR equilibrium occurs at the intersection of the AD & LRAS curves Term: LRAS GDP Definition: 1. potential GDP, 2. Natural GDP, 3. Unemployment GDP (Fric + Struc = Nat Unemp), 4. full employment GDP, 5. Maximum Sustainable GDP Term: LRAS movementsDefinition: economy is too hot = left of SR equilibrium, Inflationary Gap = too much spending; economy is too cold = of SR equilibrium, Recessionary/Contractionary Gap; economy is just right at LR equilibrium when at SR equilibrium Term: credit market/loanable Definition: where you would use the interest rate effect - PL down, PP$ up = more borrowers <aggregate qty demanded increased>, int rate down & PL up, PP$ down = less borrowers <aggregate qty decreased>, int rate up; s = savers, D = borrowers, int rate y-ax Term: difference between SR & Definition: SR = adj/changes cannot be made, LR they |
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