Flashcards - Overview of Aggregate Demand & Supply

Flashcards - Overview of Aggregate Demand & Supply
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supply shock
A supply shock is an event that suddenly increases or decreases the supply of a commodity or service, or of commodities and services in general
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sticky prices
Nominal rigidity, also known as price-stickiness or wage-stickiness, describes a situation in which the nominal price is resistant to change
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inflation
In economics, inflation is a sustained increase in the general price level of goods and services in an economy over a period of time
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full employment
Full employment, in macroeconomics, is the level of employment rates where there is no cyclical or deficient-demand unemployment
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recession
In economics, a recession is a negative economic growth for two consecutive quarters
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10 cards in set
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recession
In economics, a recession is a negative economic growth for two consecutive quarters
full employment
Full employment, in macroeconomics, is the level of employment rates where there is no cyclical or deficient-demand unemployment
inflation
In economics, inflation is a sustained increase in the general price level of goods and services in an economy over a period of time
sticky prices
Nominal rigidity, also known as price-stickiness or wage-stickiness, describes a situation in which the nominal price is resistant to change
supply shock
A supply shock is an event that suddenly increases or decreases the supply of a commodity or service, or of commodities and services in general
Disposable income
Disposable income is total personal income minus personal current taxes
aggregate supply
In economics, aggregate supply or domestic final supply is the total supply of goods and services that firms in a national economy plan on selling during a specific time period
expansionary gap
An inflationary gap, in economics, is the amount by which the actual gross domestic product exceeds potential full-employment GDP
The marginal propensity to save
The marginal propensity to save is the fraction of an increase in income that is not spent on an increase in consumption
multiplier effect
In macroeconomics, a multiplier is a factor of proportionality that measures how much an endogenous variable changes in response to a change in some exogenous variable

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