Across
- 2. an event that shifts the aggregate demand
- 4. when a short-run macroeconomic equilibrium is at the full-employment level of output (on the LRAS curves)
- 5. (of a change in the aggregate price level) the change in investment and consumer spending caused by altered interest rates that result from changes in the demand for money
- 7. when aggregate output is below potential output
- 8. fiscal policy that is the result of deliberate actions by policy makers rather than rules
- 9. 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
- 11. equal to −MPC/(1 − MPC); the factor by which a change in tax collections changes real GDP
- 16. shows the positive 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
- 18. government spending and taxation rules that cause fiscal policy to be automatically expansionary when the economy contracts and automatically contractionary when the economy expands
- 20. the value of a household’s accumulated savings
- 21. (of a change in the aggregate price level) the change in consumer spending caused by the altered purchasing power of consumers’ assets
- 22. the time period in which all inputs or prices (including nominal wages) are fully flexible or can be varied
- 23. the quantity of aggregate output produced in the short-run macroeconomic equilibrium; identified on the horizontal axis of an AD-AS graph
- 24. the investment spending that businesses intend to undertake during a given period
- 26. equal to 1/(1 – MPC) or 1/MPS; the ratio of the total change in real GDP caused by an autonomous change in aggregate spending to the size of that autonomous change; indicates the total rise in real GDP that results from each $1 of an initial rise in spending
- 27. the increase in consumer spending when disposable income rises by $1
- 29. the time period in which many production costs, including nominal wages, are not fully flexible; time period in which at least one input is fixed
- 30. the factor by which a change in both spending and taxes changes real GDP
- 31. an event that shifts the short-run aggregate supply curve
- 32. where the quantity of aggregate output supplied is equal to the quantity of aggregate output demanded — that is, where the AD and SRAS curves intersect
- 33. the combination of inflation and stagnating (or falling) aggregate output
- 34. the aggregate price level in the short-run macroeconomic equilibrium; identified on the vertical axis of an AD-AS graph
- 35. the increase in household savings when disposable income rises by $1
- 36. shows the relationship between the aggregate price level and the quantity of aggregate output supplied in the economy
- 37. inflation caused by an increase in aggregate demand
Down
- 1. the dollar amount of the wage paid
- 3. 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
- 6. model in which the aggregate supply curve and the aggregate demand curve are used together to analyze fluctuations in the price level and real GDP
- 10. fiscal policy that reduces aggregate demand to close an inflationary gap; involves the government decreasing spending or transfer payments, or increasing taxes
- 12. (of a change in the aggregate price level) the change in net exports caused by a change in the value of the domestic currency, which leads to a change in the relative price of domestic and foreign goods and services
- 13. the value of the change in inventories held in the economy during a given period
- 14. the use of government purchases of goods and services, government transfers, or tax policy to stabilize the economy
- 15. fiscal policy that increases aggregate demand to close a recessionary gap; involves the government increasing spending or transfer payments, or decreasing taxes
- 17. when aggregate output is above potential output
- 19. shows the relationship between the aggregate price level and the quantity of aggregate output supplied that would exist if all prices, including nominal wages, were fully flexible
- 25. the percentage difference between actual aggregate output and potential output
- 28. inflation caused by a significant increase in the price of an input with economy-wide importance