aggregate demand and supply definitions Flashcards

(16 cards)

1
Q

gross investment

A

the total amount a country or company spends on new capital good

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1
Q

net investment

A

gross investment minus depreciation

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2
Q

net trade balance

A

the total value of exported goods and services minus the total value of imported products.

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3
Q

tariff

A

tax on imports

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4
Q

aggregate supply

A

total amount producers in economy are willing and able to supply at a given price level in given time period

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5
Q

short run aggregate supply

A

shows total planned output when prices in economy can change but prices and productivity of all factor inputs = constant

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6
Q

long run aggregate supply

A

output when prices can change
measure of a countrys potential output.

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7
Q

classical LRAS

A

measure of countrys potential output , shows productive potential of ecconomy - full capacity output

assume in long run wages = flexible and unemployment = eliminated as real wages adjust

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8
Q

Keynesian lRAS

A

in long run wages are sticky and may not fall far enough to eliminate unemployment.

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9
Q

accelerator theory

A

theory level of investment is related to past changes in income

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10
Q

net trade

A

exports - imports

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11
Q

net investment

A

gross investment minus depreciation

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12
Q

supply-side shocks

A

factors which cause short run aggregate supply curve to shift

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13
Q

investment

A

addition of capital stock to economy

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14
Q

budget deficit

A

gov spending higher than taxation in a fiscal year

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15
Q

budget surplus

A

gov spending less than taxation