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12 Cards in this Set
- Front
- Back
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AD-AS Model |
The aggregate supply curve and the aggregate demand curve are used together to analyze economic fluctuations |
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Short-run Macroeconomic equilibrium |
When the quantity of aggregate output supplied is equal to the quantity demanded |
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Short-run equilibrium aggregate price level |
The aggregate price level in the short run Macroeconomic equilibrium |
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Short run equilibrium aggregate output |
The quantity of aggregate output produced in the short run Macroeconomic equilibrium |
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Supply shock |
The event that's shifts the short run aggregate supply curve |
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Demand shock |
An event that shifts the aggregate demand curve |
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Stagflation |
The combination of inflation and stagnating (or falling) aggregate output |
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Long run Macroeconomic equilibrium |
When the point of short run Macroeconomic equilibrium is on the long run aggregate supply curve |
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Recessionary gap |
Occurs when aggregate output is below the potential output |
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Inflationary gap |
Occurs when aggregate output is above potential output |
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Output gap |
The percentage difference between actual demand affect aggregate output in the show run, but not in the long run |
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Stabilization policy |
Is the user of government policy to reduce severity of recessions and rein in excessively strong expansions |
