Econ Chapt 13 Flashcards
1
Q
Menu Costs
A
the changing of cost prices
2
Q
Sticky Prices
A
prices resistant to change
3
Q
Nominal Wage Confusion
A
workers respond to their nominal wage instead of real wage
4
Q
Changes in velocity (v)
A
- Are the same as changes in the spending rate, holding M constant
- Changes in V tend to be temporary
5
Q
When aggregate demand falls due to a fall in the money supply:
A
economy shifts to a new short-run equilibrium point
