Economics Unit 2 - How the macroeconomy works

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At what point does macroeconomic equilibrium occur?
AS = AD
1 of 10
What is aggregate demand?
Total demand of all goods and services in an economy at a given time period
2 of 10
What is the equation for aggregate demand?
C + I + G + (X - M)
3 of 10
What is aggregate supply?
The total amount of goods and services that produces are willing and able to supply at a given price
4 of 10
What are the causes for a shift in the SRAS?
Subsidies and Cost of production
5 of 10
What are the causes for a shift in the LRAS? (PIIL)
Productivity, Investment, Innovation, Labour market
6 of 10
What is the multiplier effect?
A change in 1 of the components of AD, leads to a multiplied final change in the level of GDP
7 of 10
What is the accelerator effect?
Investment levels are related to the rate of change of GDP
8 of 10
What is saving?
Income that is not consumed
9 of 10
What is investment?
An addition to the capital stock
10 of 10

Other cards in this set

Card 2

Front

What is aggregate demand?

Back

Total demand of all goods and services in an economy at a given time period

Card 3

Front

What is the equation for aggregate demand?

Back

Preview of the front of card 3

Card 4

Front

What is aggregate supply?

Back

Preview of the front of card 4

Card 5

Front

What are the causes for a shift in the SRAS?

Back

Preview of the front of card 5
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