AP Economics Vocab- 33, 34, 35 Flashcards
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| 359778049 | Recession | A period of mildly falling incomes and rising unemployment | |
| 359778050 | Depression | A period of unusually severe falling incomes and rising unemployment | |
| 359778051 | The Business Cycle | Short-run economic fluctuations | |
| 359778052 | Model of Aggregate Demand and Aggregate Supply | The model most economists use to explain short-run fluctuations in the economy around its long-run trend | |
| 359778053 | Aggregate-Demand Curve | A curve that shows the quantity of goods and services that households, firms, the government, and costumers abroad are willing to buy at each price level | |
| 359778054 | Aggregate-Supply Curve | A curve that shows the quantity of goods and services that firms are willing to produce at each price level | |
| 359778055 | Natural Rate of Output | The production of goods and services that an economy achieves in the long run when unemployment is at its natural or normal rate | |
| 359778056 | Menu Costs | Costs associated with changing prices | |
| 359778057 | Stagflation | A period of falling output and rising prices | |
| 359778058 | Accommodative Policy | A policy of increasing aggregate demand in response to a decrease in aggregate supply | |
| 359778059 | Theory of Liquidity Preference | Keynes's theory that the interest rate is determined by the supply and demand for money in the short run | |
| 359778060 | Liquidity | The ease with which an asset is converted into a medium of exchange | |
| 359778061 | Federal Funds Rate | The interest rate banks charge on another for short-term loans | |
| 359778062 | Fiscal Policy | The setting of the level of government spending and taxation by government policymakers | |
| 359778063 | Multiplier Effect | The amplification of the shift in aggregate demand from expansionary fiscal policy, which raises incomes and further increases consumption expenditures | |
| 359778064 | Investment Accelerator | The amplification of the shift in aggregate demand from expansionary fiscal policy, which raises investment expenditures | |
| 359778065 | Marginal Propensity to Consume (MPC) | The fraction of extra income that a household spends on consumption | |
| 359778066 | Crowding-Out Effect | The dampening of the shift in aggregate demand from expansionary fiscal policy, which raises the interest rate and reduces investment spending | |
| 359778067 | Stabilization Policy | The use of fiscal and monetary policies to reduce fluctuations in the economy | |
| 359778068 | Automatic Stabilizers | Changes in fiscal policy that do not require deliberate action on the part of policymakers | |
| 359778069 | Misery Index | The sum of inflation and unemployment | |
| 359778070 | Phillips Curve | The short-run trade-off between inflation and unemployment | |
| 359778071 | Natural Rate of Unemployment | The normal rate of unemployment toward which the economy gravitates | |
| 359778072 | Natural-Rate Hypothesis | The theory that unemployment returns to its natural rate, regardless of inflation | |
| 359778073 | Disinflation | A reduction in the rate of inflation | |
| 359778074 | Supply Shock | An event that directly alters firms' costs and prices, shifting the economy's aggregate-supply curve and, thus, the Phillips Curve | |
| 359778075 | Sacrifice Ratio | The number of percentage points of annual output that is lost in order to reduce inflation one percentage point | |
| 359778076 | Rational Exceptions | The theory that suggests that people optimally use all available information, including about government policies, when forecasting the future |