Chapter 14 Flashcards

1
Q

Recession

A

Period of falling incomes and rising unemployment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Depression

A

Severe recession

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Three key facts about economic fluctuations

A

1: Economic fluctuations are irregular and unpredictable
2: Most macroeconomic quantities fluctuate together
3: As output falls, unemployment rises

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Model of aggregate demand and aggregate supply

A

Model economists use to explain short-run fluctuations in economic activity arounds its long-run trend

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Aggregate-demand curve

A

Curve that shows quantity of goods and services that households, firms, and the government want to buy at each price level

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Aggregate-supply curve

A

Curve that shows the quantity of goods and services that firms choose to produce and sell at each price level

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Why might aggregate-demand shift

A

Changes in:
consumption
investment
government purchases
net exports

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Why is the aggregate-supply vertical in the long run

A

Economy’s production of goods and services depends on its supplies of labour, capital, and natural resources and on the available technology used to turn these factors of production into goods and services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Why might Long-run Aggregate-Supply shift

A

Natural rate of output
Potential output
Full-employment
changes in labour
changes in capital
changes in natural resources
changes in technological knowledge

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Natural rate of ouput

A

Production of goods and services that an economy achieves in the long run when unemployment is at its normal rate

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

why does Aggregate-Supply curve slope upwards in the short run

A

Sticky-wage theory
Sticky-price theory
Misperceptions theory

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Stagflation

A

Period of falling output and rising prices

How well did you know this?
1
Not at all
2
3
4
5
Perfectly