ch 10 macroeconomics
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Aggregate demand curve (AD)
A downward slope. The level that shows the level of real GDP purchased by householders, business, goverment and foreigners (net exports) at different posible price levels during a time period, ceteris paribus.
Real balances effect
The impact on total spending (real DGP) caused by the inverse relationship beetwen the proce level and the real value of financial assets with fixed nominal value.
The impact on total spending (Real GDP)caused by the indirect relationship beetwen the price level and the interest rate.
The impact on total spendig (real GDP) caused by the inverse relationship beetween the price level and the next exports of an economy.
Aggregate supply curve (AS)
The curve that shows the level of real GDP produced at different possible price level during a time period, ceteris paribus.
Ranges of the aggregate Supply curve
- Keynesian range
- Intermediate range
- Classical range
The horizaontal segment of the aggregate suply curve, which represents an economy in a severe recession.
The rising segment of the aggregate supply curve, which represents an economy as it approaches full-employment output.
The vertical segment of the aggregate supply curve, which represents an economy at full-employment putput.
The condition that accurs when an economy experiences the twin maladies of high unemployment and rapid inflation simultaneusly.
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