Exam 4 Flashcards
0
Q
Economic fluctuations are
A
Irregular & unpredictable
1
Q
Monetary policy affects real variables in the
A
Short run
2
Q
Aggregate demand curve
A
Shows relationship between price level & quantity of goods & services demanded by households & firms
3
Q
Aggregate supply curve
A
Relationship between price level & quantity of goods/services firms want to sell
4
Q
Sticky wage theory
A
If wages take longer to change than other prices then labor will be relatively cheap for awhile & firms will produce more
5
Q
Sticky price theory
A
If prices don’t adjust right away, the higher demand for goods & services will encourage firms to produce more
6
Q
Misperceptions theory
A
Sellers see prices go up & think this means high demand for their product, so they increase production
