Term
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Definition
| The quantity of real GDP supplied is the total amount of final goods and services that firms in the United States plan to produce |
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Term
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Definition
| The total amount of final goods and services produced in the US that people, businesses, governments, and foreigners plan to buy |
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Term
| The quantity of real gdp supplied depends onthe quantities of |
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Definition
labor employed
capital,human capital,and the state of technology
Land and natural resources
Entrepreneurial Talent
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Term
| The relationship between the quantity of real GDP supplied |
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Definition
| when price level rises quantity of real GDP supplied increases |
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Term
| When the price level rises what happens to supply and demand |
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Definition
demand decreases
supply increases |
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Term
| Influences on aggregate supply |
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Definition
the wage rate
prices of other resources |
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Term
Aggregate supply changes when
(any influence on production plans other than price level change) |
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Definition
possible total hrs of labor employed
capital,human capital,and state of tech
land & other natural resources
change |
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Term
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Definition
| the interest rate before adjustment for inflation rate |
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Term
Aggregate Demand
(gdp equation) |
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Definition
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Term
Changes in aggregate demand
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Definition
any factor that influences expenditure plans other than price level
Increase investment -> increase consumption expenditure-> Increase aggregate demand |
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Term
an increase in investment leads to a
___________ in consumption expenditure and a ________ in aggregate demand |
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Definition
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Term
| As the demand for money increases, the nominal interest rate_____ which leads to a _____ in the real interest rate |
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Definition
| Rises, because the inflation rate does not change it leads to a rise inthe REAL interest rate. |
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Term
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Definition
| is changing tax rates, transfer payments,and government expenditures on goods and services |
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Term
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Definition
| can use monetary policy to influence aggregate demand |
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Term
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Definition
| Is changing the quantity of money and the interest rate |
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Term
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Definition
| when AS and AD rise at similar rates - nation income can rise without effects on inflation. |
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