Enhance Your Learning with Economics - Aggregate Demand and Supply Flash Cards for quick understanding
The total demand for goods and services in an economy at a given time and price level.
The total supply of goods and services in an economy at a given time and price level.
The branch of economics that studies the behavior and performance of an economy as a whole.
The branch of economics that studies the behavior and decisions of individual agents, such as households and firms.
The total supply of goods and services that firms are willing and able to produce in the short run, taking into account the current price level and input prices.
The total supply of goods and services that firms are willing and able to produce in the long run, when all input prices have fully adjusted to changes in the price level.
The state in which aggregate demand equals aggregate supply, resulting in a stable price level and level of output.
The use of government spending and taxation to influence the economy, particularly aggregate demand.
The use of monetary tools, such as interest rates and the money supply, to influence the economy, particularly aggregate demand.
An economy that engages in international trade and has flows of goods, services, and capital with other countries.
An increase in the production of goods and services over time, resulting in a higher standard of living.
A sustained increase in the general price level of goods and services in an economy over time.
The state of being without a job, actively seeking employment, and available to work.
Government policies aimed at reducing fluctuations in the business cycle, such as fiscal and monetary policies.
Sudden changes in aggregate demand or supply that can disrupt the equilibrium in the aggregate market and lead to economic fluctuations.
The four components of aggregate demand: consumption, investment, government spending, and net exports.
Factors that influence the level of aggregate demand, such as consumer confidence, interest rates, and government policies.
Changes in the total supply of goods and services due to factors such as changes in input prices, technology, and government regulations.
The interaction of aggregate demand and supply in an economy that engages in international trade, considering factors such as exchange rates and trade policies.
A Latin phrase meaning 'all other things being equal,' used in economics to isolate the effect of a single variable on an outcome.
The idea that an initial change in spending can lead to a larger change in aggregate demand and output through a chain reaction of increased spending.
A curve that shows the inverse relationship between the unemployment rate and the inflation rate in an economy.
An economic theory that focuses on increasing the supply of goods and services as a means to stimulate economic growth and reduce unemployment.
A phenomenon in which increased government spending or borrowing reduces private sector investment, leading to a decrease in aggregate demand.
A curve that illustrates the relationship between tax rates and tax revenue, suggesting that there is an optimal tax rate that maximizes government revenue.
An empirical relationship between the unemployment rate and the output gap in an economy, suggesting that for every 1% increase in the unemployment rate, there is a 2% decrease in the output gap.
The phenomenon in which wages do not adjust immediately to changes in the price level, leading to short-run fluctuations in employment and output.
The phenomenon in which prices do not adjust immediately to changes in the price level, leading to short-run fluctuations in output and inflation.
The rate of unemployment that exists when the economy is at full employment, consisting of frictional and structural unemployment.
The maximum sustainable level of output that an economy can produce without putting upward pressure on inflation.
The total spending on goods and services in an economy, consisting of consumption, investment, government spending, and net exports.
The ratio of the change in output to the initial change in spending, indicating the magnifying effect of changes in spending on aggregate demand and output.
The fraction of additional income that is spent on consumption, indicating the responsiveness of consumption to changes in income.
The fraction of additional income that is saved, indicating the responsiveness of saving to changes in income.
Government programs and policies that automatically stabilize the economy during economic downturns, such as unemployment benefits and progressive income taxes.
Government policies that increase government spending or reduce taxes to stimulate aggregate demand and promote economic growth.
Government policies that decrease government spending or increase taxes to reduce aggregate demand and control inflation.
Central bank policies that increase the money supply or reduce interest rates to stimulate aggregate demand and promote economic growth.
Central bank policies that decrease the money supply or increase interest rates to reduce aggregate demand and control inflation.
The price of one currency in terms of another currency, determining the cost of goods and services in international trade.
The difference between a country's exports and imports, indicating the net flow of goods and services in international trade.
Statistics and data that provide information about the performance and health of an economy, such as GDP, inflation rate, and unemployment rate.
The total value of all final goods and services produced within a country's borders in a given time period, usually a year.
The percentage increase in the general price level of goods and services in an economy over a given time period.
The percentage of the labor force that is unemployed and actively seeking employment.
The recurring pattern of expansion and contraction in an economy, consisting of periods of economic growth and recession.
A significant decline in economic activity, characterized by a decrease in GDP, investment, employment, and trade.
A severe and prolonged recession, characterized by a deep and widespread decline in economic activity.
The period of time following a recession or depression when economic activity starts to increase and return to normal levels.
A period of rapid economic growth, characterized by high levels of GDP, investment, employment, and trade.
A period of significant economic decline, characterized by low levels of GDP, investment, employment, and trade.