chapter 9

Question 1

Aggregate demand and aggregate supply model

Answer 1

explains short run flucuations in real GDP and the price level

Question 2

aggregate demand curve

Answer 2

shows the relationship between the price level and the quantity of real gdp demanded

Question 3

Short run aggregate supply curve

Answer 3

shows the relationship between price level and the quantity of real gdp supplied by firms

Question 4

monetary policy

Answer 4

actions bank of canada takes to manage the money supply and interest rates to pursue macroeconomic policy goals

Question 5

fiscal policy

Answer 5

changes in federal taxes and purchases that are intended to achieve macroeconomic policy

Question 6

potential GDP

Answer 6

level of real gdp attained when all frims are producing at capacity

Question 7

Long Run aggregate supply curve

Answer 7

shows the relationship between the price level and the quantity of real gdp supplied

Question 8

menu costs

Answer 8

the cost to firms of changing prices

Question 9

supply shcoks

Answer 9

unexpected event that causes the sras to shift