Ch 16 - Aggregate Supply and Aggregate Demand

The ________ shifts the AD to the left, and creates a new equilibrium point.

Is the pattern experienced by the economy.

Before wages and other resource prices have adjusted to macroeconomic conditions.

When ________ rises, aggregate demand decreases and vise versa.

When households begin to spend more and gain less, this decreases aggregate demand.

Is consistent high inflation paired with high unemployment and stagnant demand in a country’s economy.

is a statistical measure of consumers feelings about current and future economic problems, and is used as indicator of the overall state of the economy.

end of expansion and the beginning of contraction.

The end of contraction and the beginning of expansion.

A sustained decline in economic activity.

The amount of output that results in no shortage or surplus; the amount of goods and services bought and sold in the economy.

is vertical due to the amount supplied in the long run which does not depend on the price level.

Is an increase in the production of goods and services in an economy.

since less production means less demand for labor.

An unexpected change in short- run or long- run aggregate supply.

Is affected by many factors, however, it can all be categorized in groups.

When price level rises, on reason aggregate demand declines is due to foreign demand decreasing.

A sustained improvement in economic activity.

In the short run, ________ is unaffected as a change in price level is not matched by a change in input costs.

An increase in resources or technological advances shifts ________ to the right, while a reduction in resources or a decline in technological productivity shifts ________ to the left.

Is the amount of goods and services demanded by households, businesses, governments, and foreigners.

After wages and other resource prices have adjusted to macroeconomic conditions.

A rise in ________ leads to an increase in aggregate supply.

is the amount of all goods and services brought to market by all producers.

Is measured by dollars instead of value.

is the pattern experienced by the economy

a sustained decline in economic activity

A sustained improvement in economic activity

end of expansion and the beginning of contraction

the end of contraction and the beginning of expansion

is the amount of all goods and services brought to market by all producers

aggregate supply after wages and other resource prices have adjusted to macroeconomic conditions

Technological advances and increase/decrease in resources

aggregate supply before wages and other resource prices have adjusted to macroeconomic conditions

is the amount of goods and services demanded by households, businesses, governments, and foreigners

When price level rises, on reason aggregate demand declines is due to foreign demand decreasing

When households begin to spend more and gain less, this decreases aggregate demand

is a statistical measure of consumers feelings about current and future economic problems, and is used as indicator of the overall state of the economy

foreigners demand less when domestic prices rise because their income have not risen in tandem, and domestic consumers prefer more imports since domestic prices are up2

financial wealth is destroyed when prices rise, this causes consumers to save more and spend less

The price level that equates aggregate supply and aggregate demand; the average level of prices in the economy

the amount of output that results in no shortage or surplus; the amount of goods and services bought and sold in the economy

is consistent high inflation paired with high unemployment and stagnant demand in a countrys economy

an unexpected change in short-run or long-run aggregate supply

is an increase in the production of goods and services in an economy

when labor becomes better triand and more effective