Save
Busy. Please wait.
or

show password
Forgot Password?

Don't have an account?  Sign up 
or

Username is available taken
show password

why


Make sure to remember your password. If you forget it there is no way for StudyStack to send you a reset link. You would need to create a new account.
We do not share your email address with others. It is only used to allow you to reset your password. For details read our Privacy Policy and Terms of Service.


Already a StudyStack user? Log In

Reset Password
Enter the associated with your account, and we'll email you a link to reset your password.
focusNode
Didn't know it?
click below
 
Knew it?
click below
Don't know (0)
Remaining cards (0)
Know (0)
0:00
share
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.

  Normal Size     Small Size show me how

ECON 1 test 3 ch 8

macroeconomics ch 8 Aggregate Demand & Aggregate Supply

TermDefinition
aggregate demand (AD) the qty of all goods & services (Real GDP) at different price levels, ceteris paribus; represents spenders
aggregate demand (AD) curve downward slope b/c 1. real balance effect (wealth), 2. interest rate effect, 3. int'l (foreign) trade effect; inverse relationship between the Price level & the qty demanded of Real GDP
AD curve equation AD = C+I+G+Nx; left side of = sign, house to house movement, right side of = sign, street to street movement; direct relationship, one side of = sign goes up, so does the other & vice versa
real balance effect the change in the purchasing power of dollar-denominated assets that results fr a change in the price level; basically when your money means more, you buy more; house to house movement
interest rate effect the changes in household & business spending that is sensitive to changes in the interest rate; inverse relationship, house to house movement
international trade effect the changes in foreign sector spending as the PL changes; PL down, PP$ up Qty up (buy more) US goods & PL up, PP$ down Qty down (buy less) US goods; house to house movement
monetary wealth the value of a person's monetary assets only
wealth the value of all assets owned, both monetary & nonmonetary
exchange rate the price of one currency in terms of another currency
appreciation an increase in the value of one currency relative to other currencies; PP$ up ->US Ex up US Im down -> Nx up -> AD up
depreciation a decrease in the value of one currency relative to other currencies; PP$ down -> US Ex down US Im up -> Nx down -> AD down
velocity the average # of times a dollar is spent to buy final goods & services in a yr
aggregate supply the qty supplied of all goods & services (Real GDP) at different price levels, ceteris paribus
Short-Run Aggregate Supply (SRAS) Curve a curve that shows the qty supplied of all goods & services (Real GDP) at different price levels, ceteris paribus; represents producers, upward sloping b/c sticky wages & worker misperceptions (house to house)
SRAS shifters (street to street) wage rates (inverse), prices of nonlabor inputs (inverse), productivity (direct), supply shocks (beneficial SRAS up, adverse SRAS down)
short-run equilibrium 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 intersect
natural real GDP the real GDP that is produced at the natural unemployment rate; the real GDP that is produced when the economy is in long-run equilibrium; Qn
long-run aggregate supply (LRAS) curve a vert line at the level of natural real GDP; represents the output the economy produces when wages & prices have adjusted to their equilibrium levels when wkrs do not have any relevant misperceptions; the economy's potential
long-run equilibrium the condition that exists in the economy when wages & prices have adjusted to their (final) equilibrium level when wkrs don't have any relevant misperceptions; graphically LR equilibrium occurs at the intersection of the AD & LRAS curves
LRAS GDP names 1. potential GDP, 2. Natural GDP, 3. Natural Unemployment GDP (Fric + Struc = Nat Unemp), 4. full employment GDP, 5. Maximum Sustainable GDP
LRAS Curve movements economy is too hot = left of SR equilibrium, Inflationary Gap = too much spending; economy is too cold = right of SR equilibrium, Recessionary/Contractionary Gap; economy is just right at LR equilibrium when at SR equilibrium
credit market/loanable funds 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 demanded decreased>, int rate up; s = savers, D = borrowers, int rate y-ax
difference between SR & LR SR = adj/changes cannot be made, LR they can
Created by: katt61
 

 



Voices

Use these flashcards to help memorize information. Look at the large card and try to recall what is on the other side. Then click the card to flip it. If you knew the answer, click the green Know box. Otherwise, click the red Don't know box.

When you've placed seven or more cards in the Don't know box, click "retry" to try those cards again.

If you've accidentally put the card in the wrong box, just click on the card to take it out of the box.

You can also use your keyboard to move the cards as follows:

If you are logged in to your account, this website will remember which cards you know and don't know so that they are in the same box the next time you log in.

When you need a break, try one of the other activities listed below the flashcards like Matching, Snowman, or Hungry Bug. Although it may feel like you're playing a game, your brain is still making more connections with the information to help you out.

To see how well you know the information, try the Quiz or Test activity.

Pass complete!

"Know" box contains:
Time elapsed:
Retries:
restart all cards