chap 8

Question 1

business cycle?

Answer 1

alternating periods of economic growth and contraction

Question 2

what is aggregate demand?

Answer 2

total demand for final goods and services in an economy at a given time, ceteris paribus

Question 3

Say’s Law?

Answer 3

supply creates its own law

Question 4

law of demand?

Answer 4

quantity of a good demanded in a given time period increases as its price falls

Question 5

Recession?

Answer 5

decline in total output (real GDP) for two ore more consecutive quarters

Question 6

Growth Recession?

Answer 6

period during which real GDP grows, but at a rate below the long-term trend of 3%

Question 7

aggregate supply?

Answer 7

total quantity of output (real GDP) producers are willing and able to supply at alternative price levels in a given time period, ceteris paribus

Question 8

full-employment GDP

Answer 8

total market value of final goods and services that could be produced in a given time period at full employment

Question 9

Fiscal Policy?

Answer 9

use of government taxes and spending to alter macroeconomic outcomes

Question 10

Monetary Policy?

Answer 10

use of money and credit controls to influence macroeconomic outcomes

Question 11

Supply-side policy?

Answer 11

use of tex incentives, (de)regulation, other mechanisms to increase the ability and willingness to produce goods and services