Save
Busy. Please wait.
Log in with Clever
or
show password
Forgot Password?
Don't have an account?  Sign up 
Sign up using Clever
or
Username is available taken
show password


Make sure to remember your password. If you forget it there is no way for StudyStack to send you a reset link. You would need to create a new account. Your email address is only used to allow you to reset your password. See our Privacy Policy and Terms of Service.

Already a StudyStack user? Log In

Reset Password
Enter the associated with your account, and we'll email you a link to reset your password.
focusNode
Didn't know it?
click below
 
Knew it?
click below
Don't Know
Remaining cards (0)
Know
0:00
edit
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.

  Normal Size     Small Size show me how

Fratrik AP Macro

Unit Four Vocab - National Income and Price Determination - Modules 16-21

TermDefinition
autonomous change in aggregate spending an initial rise or fall in aggregate spending that is the cause, not the result, of a series of income and spending changes
autonomous consumer spending the amount of money a household would spend if it had no disposable income.
inventories stocks of goods and raw materials held to satisfy future sales.
marginal propensity to consume (MPC) the increase in consumer spending when income rises by $1. Because consumers normally spend part but not all of an additional dollar of disposable income, MPC is between 0 and 1.
marginal propensity to save (MPS) the increase in household savings when disposable income rises by $1.
multiplier the ratio of total change in real GDP caused by an autonomous change in aggregate spending to the size of that autonomous change.
aggregate demand curve shows the relationship between the aggregate price level and the quantity of aggregate output demanded by households, businesses, the government, and the rest of the world.
fiscal policy the use of taxes, government transfers, or government purchases of goods and services to stabilize the economy.
monetary policy the central bank's use of changes in the quantity of money or the interest rate to stabilize the economy
aggregate supply curve a graphical representation that shows the relationship between the aggregate price level and the total quantity of aggregate output supplied.
long-run aggregate supply curve a graphical representation of the relationship between the aggregate price level and the quantity of aggregate output supplied if all prices, including nominal wages, were fully flexible. The long-run aggregate supply curve is vertical.
potential output the level of real GDP the economy would produce if all prices, including nominal wages, were fully flexible.
short-run aggregate supply curve a graphical representation of the relationship between the aggregate price level and the quantity of aggregate output supplied that exists in the short run, the time period when many production costs can be taken as fixed.
sticky wages nominal wages that are slow to fall even in the face of high unemployment and slow to rise even in the face of labor shortages.
AD/AS model the basic model used to understand fluctuations in aggregate output and the aggregate price level. It uses the aggregate demand curve and the aggregate supply curve together to analyze the behavior of the economy.
self-correcting refers to the fact that in the long run, shocks to aggregate demand affect aggregate output in the short run, but not the long run.
inflationary gap exists when aggregate output is above potential output.
long-run macroeconomic equilibrium a situation in which the short-run macroeconomic equilibrium is also on the long-run aggregate supply curve; so short-run equilibrium aggregate output is equal to potential output.
recessionary gap exists when aggregate output is below potential output.
stagflation the combination of inflation and falling aggregate output.
supply shock an event that shifts the short-run aggregate supply curve. A negative supply shock raises production costs and reduces the quantity supplied at any aggregate price level, shifting the curve leftward.
contractionary fiscal policy fiscal policy that reduces aggregate demand by decreasing government purchases, increasing taxes, or decreasing transfers.
expansionary fiscal policy fiscal policy that increases aggregate demand by increasing government purchases, decreasing taxes, or increasing transfers.
automatic stabilizers government spending and taxation rules that cause fiscal policy to be automatically expansionary when the economy contracts and automatically contractionary when the economy expands.
discretionary fiscal policy fiscal policy that is the direct result of deliberate actions by policy makers rather than rules.
Created by: fratrik
Popular Economics sets

 

 



Voices

Use these flashcards to help memorize information. Look at the large card and try to recall what is on the other side. Then click the card to flip it. If you knew the answer, click the green Know box. Otherwise, click the red Don't know box.

When you've placed seven or more cards in the Don't know box, click "retry" to try those cards again.

If you've accidentally put the card in the wrong box, just click on the card to take it out of the box.

You can also use your keyboard to move the cards as follows:

If you are logged in to your account, this website will remember which cards you know and don't know so that they are in the same box the next time you log in.

When you need a break, try one of the other activities listed below the flashcards like Matching, Snowman, or Hungry Bug. Although it may feel like you're playing a game, your brain is still making more connections with the information to help you out.

To see how well you know the information, try the Quiz or Test activity.

Pass complete!
"Know" box contains:
Time elapsed:
Retries:
restart all cards