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riggers unit 3 test| Questions and 100% Complete Solutions
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riggers unit 3 test| Questions and 100%Complete Solutions
aggregate supply - ✔the total amount of goods and services (real gdp) firms
will produce at different price levels. Supply of everything from firms
short run aggregate supply - ✔wages and resource prices will not increase as
price levels increase. they are "sticky"
long run aggregate supply - ✔wages and resource prices will increase as price
levels increase
Short run aggregate supply curve - ✔
shifters of aggregate supply - ✔1. Change in resource prices
- price of domestic/imported goods
- supply shocks
- inflationary expectations
2. change in actions of the
government - taxes on producers
-subsidies for domestic producers
NOT GOV SPENDING
3. change in productivity
-technology
, long-run aggregate supply curve - ✔shows the relationship between the aggregate
price level and the quantity of aggregate output supplied that would exist if all
prices, including nominal wages, were fully flexible
real gdp does not change, but price level does.
shifts in lras - ✔- change in resource quantity/quality
- changes in tech/productivity
PERMENENT changes in production possiblities
recessionary gap, inflationary gap and full employment - ✔below full employment/
ppc curve is recessionary (negative output gap)
above/beyond full employment/ ppc curve is inflationary (positive output gap)
full employment is at potential output gap
stagflation - ✔A period of falling output and rising prices (WORST OUTCOME)
Causes of inflation - ✔demand pull: pulls up prices
cost push: Higher production costs increase prices
capitol stock - ✔General term referring to a corporation's stock used in
obtaining capital (owner financing).
economic growth - ✔when the LRAS shifts to the right permenantly
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