AS残留

Question 1

debt

Answer 1

Accumulation of gov borrowing to fund the annual fiscal deficit

Question 2

stagflation

Answer 2

E.G. Slows and high inflation

Question 3

Wage-price spiral

Answer 3

P rise=> cost of living rise=> wage rise => cop rise => p rise

Higher wages increase Yd, thus raising the D for goods and causing p rise

Question 4

Yd

Answer 4

Y after tax deducted and benefit added

Question 5

The 3 reasons why AD is downward sloping

Answer 5

Real balance effect: PL and PP
Inter compe
Interest rate: higher PL higher ir lower I

Question 6

Ue types

Answer 6

Real wage / classical 
Demand deficient / cyclical
Seasonal
Frictional 
Structural

Question 7

shoe lather cost

Answer 7

To save on d interest ppl will hold less cash and make more trips to the bank

Question 8

underemployment

Answer 8

When an indi is employed but would prefer to work longer hrs and is seeking to do so/ working below their skill level

Question 9

Low interest in savers

Answer 9

Lower return=lower oppo cost of holding casual=lower Yd

Question 10

How to finance fiscal deficit

Answer 10

Borrowing

Sales of gov bonds, gov pay ir, future repaid

Question 11

what’s the 1st chain of Phillips curve?

Answer 11

EG= fall in spare capacity

Question 12

Productivity puzzle An

Answer 12

Falling r wage

Adopt labour intensive

Question 13

PPP

Answer 13

An er that compares how much a typical basket of goods in one country costs compared to that of another country
Adjusted for cost of living

Question 14

Retained profits

Answer 14

Profit kept back by a firm for its own use which is not distributed to shareholders