AP Macroeconomics: Chapter 15 Flashcards

9649126968	short run	a period in which nominal wages (and other input prices) are unresponsive to changes in the price level	0
9649126969	long run	a period in which nominal wages are fully responsive to changes in the price level	1
9649126972	Phillips Curve	the inverse relationship between the rate of inflation and unemployment	2
9649126973	stagflation	higher rates of both inflation and unemployment	3
9649126974	aggregate supply shocks	either an inflation shock or a shock to a country's potential national outpu	4
9649126975	disinflation	reductions in the inflation rate from year to year	5
9649126976	supply-side economics	views aggregate supply as active rather than passive in explaining changes in the price level and unemployment	6
9649126977	Laffer Curve	suggests that it is possible to lower tax rates and increase tax revenues, thus avoiding a budget deficit because the policies will result in less tax evasion and avoidance	7
9649136063	Long-run vertical Phillips Curve	The Phillips Curve after all nominal wages have adjusted to changes in the rate of inflation; a line emanating straight upward at the economy's natural rate of unemployment	8