AP Macroeconomics Flashcards
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| 9955327123 | 1.1 Aggregate Demand (AD) | The total amount that all consumers, business firms, and government agencies are willing to spend on final goods and services at various price levels at a given period of time. | 0 | |
| 9955323720 | 1.2 Aggregate Supply (AS) | The relationship between the price level and the quantity of goods and services supplied in an economy. AS curve looks different in the long run and short run. In the long run, it is a vertical line, as output is dictated by the factors of production alone. In the short run, it is upward sloping. | 1 | |
| 9955342073 | 1.3 AD/AS Graph |  | 2 | |
| 9955335264 | 1.4 Aggregate Equilibrium | The combination of real GDP and the price level when the economy is at equilibrium, jointly determined by aggregate demand and aggregate supply. | 3 | |
| 9955310065 | 1.5 Long Run Aggregate Supply (LRAS) | The level of output to which an economy will always return in the long run. The LRAS curve intersects the horizontal axis at the full employment or potential level of output. | 4 | |
| 9955303820 | 1.6 Shifters of Aggregate Demand | 1. GDP (or its components) 2. Monetary Policy 3. Fiscal Policy | 5 | |
| 9955186527 | 1.7 Shifters of Short-Run Aggregate Supply | 1. Factors of Production (LRAS) 2. Input Costs 3. Supply Shock | 6 | |
| 9955161948 | 1.8 Shifters of Long-Run Aggregate Supply | Factors of Production | 7 | |
| 9955483683 | 2.1 depreciation vs. appreciation of a currency | depreciation - decrease in VALUE of currency app-The rise in value of one currency relative to another. | 8 | |
| 9955510300 | 3.1 Loanable Funds Graph |  | 9 | |
| 9955531905 | 3.2 Loanable Funds Market | The market in which the demand for private investment and the supply of household savings intersect to determine the equilibrium real interest rate. | 10 | |
| 9955524589 | 3.3 Shifters of Demand for Loanable Funds | 1. Incentive to Invest 2. Contractionary Fiscal Policy (to the right) | 11 | |
| 9955527860 | 3.4 Shifters of Supply of Loanable Funds | 1. Incentive to Save 2. Monetary Policy 3. Expansionary Fiscal Policy (to the left) | 12 | |
| 9955564719 | 4.1 Open-Market Operations | The central bank's buying and selling of government bonds on the open market from commercial banks and the public. This is aimed at increasing or decreasing the level of reserves in the banking system and thereby affects the interest rate and the level of aggregate demand. | 13 | |
| 9955778997 | 5.1 Real Interest Rate | the interest rate corrected for the effects of inflation; Nominal interest rate - inflation rate | 14 | |
| 9955786332 | 5.2 nominal interest rate | the interest rate as usually reported without a correction for the effects of inflation | 15 | |
| 9955792581 | 5.3 interest rate effect | effect that decreases price level has on investment expenditures through the effect that a chance in price level has on interest rates | 16 | |
| 9955804354 | 5.4 Investment | A component of aggregate demand, it includes all spending on capital equipment, inventories, and technology by firms. This does not include financial investment, which is the purchase of financial assets (stocks and bonds). Also includes household purchasing of newly constructed residences. | 17 | |
| 9955818352 | 5.5 GDP Growth Rate | 18 |