Chapter 4 Flashcards
Macroeconomy
Economy as a whole
Aggregate demand
Total spending on an economy’s goods and services at a given price level in a given time period
Aggregate supply
Total output (real GDP) producers are willing and able to supply at a given price level in a given time period
Short run aggregate supply
Total output of an economy that will be supplied when there’s not enough time for prices of factors of production to change
Long run aggregate supply
Total output of a country supplied in the period when prices of factors of production have fully adjusted
Keynesians
Followers of John Maynard Keynes who maintain government intervention is needed to achieve full employment
New classical economists
Economists who think LRAS curve is vertical and economy will move towards full employment without government intervention
Macroeconomic equilibrium
Output and price level achieved where AD equals AS
GDP (National Income)
Total output of a country
Unemployment rate
measure of the number of people who are willing
and able to work but without a job
CPI ; Inflation rate
rate of change of the general price level
Balance of payment
record of money inflow and outflow of a country
AD-AS model
to explain
short-run fluctuations in economic
activity around its long-run trend
Personal consumption expenditures
Spending by households on goods and services
Investment
Spending on capital goods
