Whole Tint Flashcards
Consumer price index
mB in given year divided by MB in base year times 100
GDP Deflator
Nominal GDP divided by Real GDP times 100
Real GDP formula
Nominal GDP divided by Deflator times 100
Nominal GDP
Real GDP times deflator divided by 100
Unemployment rate
Number of unemployed divided by number of labor force times 100
Spending multiplier
1 divided by 1- Marginal propensity to consume
Money multiplier
1/ reserve ratio
Real interest rate
Nominal Interest Rate- real inflation rate
Suppose aggregate demand increases how does it shift
To the right
What do tax cuts and increased government spending do
Shifts ad to the right a
Or ms
What does lower interest rates do to AD
Shifts ad to the right
What happens to AS when raw materials go up in price
As shifts left
What happens to AS with technological advances
It goes to the right
What happens to AS with government deregulation
It shifts right
What do negative supply shocks do to the Philips curve in the short run
It shifts upwards
