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Chapter 13
| Question | Answer |
|---|---|
| a curve that shows the relationship between the price level and the quantity of real gdp demanded by households, firms , and the government | aggregate demand curve |
| a model that explains short-run fluctuations in real gdp and the price level | aggregate demand and aggregate supply model |
| a curve that shows the relationship in the short run between the price level and the quantity of real gdp supplied by firms | short run aggregate supply curve |
| the interest rate effect can be described as an increase in the price level that raises the interest rate and choke off | investment and consumption spending |
| best describes the wealth effect | when the price level falls, the real value of household wealth rises |
| potential gdp refers to the level of | real gdp in the long run |
| is vertical | long run aggregate supply |
| long run marcoeconomic equilibrium occurs when | the aggregate demand and short run aggregate supply curves intersect at a point on the long run aggregate supply curve |
| in the dynamic aggregated demand and aggregate supply, if ad shifts further than as | inflation occurs |
| the wealth effect refers to the fact that | when the price levels falls, the real value of household wealth rises, and so will consumption |
| the interest rate effect refers to the fact that a higher price level results in | higher interest rates and lower investment |
| the international trade effect refers to the fact that an increases in the price level will result in | a decrease in exports and an increase in in imports |
Created by:
nykayla