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Aggregate Supply
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the total supply of goods and services produced within an economy at all price level in a given time period.
Example: aggregate supply at a price level of 110 is $USD 10 billion.
Example: aggregate supply at a price level of 110 is $USD 10 billion.
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Aggregate Demand
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the total demand for final goods and services in an economy at a given time at all possible price levels.
Example: the aggregate demand at a price level of 95 is $USD 1 trillion dollars.
Example: the aggregate demand at a price level of 95 is $USD 1 trillion dollars.
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Components of Aggregate Demand
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The demand of consumers (C), the demand of business (I), the demand of government (G), the demand of foreigners for exports(X) minus the demand for imports(M) (X-M)
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Stagflation: Lucinda
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A term combined using "Stagnation" and "inflation". Used to describe an increase in the price level, along with a decrease in real GDP. This term was coined in the 1970s due to the actions of OPEC, which cut back its production of oil, giving rise to increases in the price of oil, a major input in production.
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Short Run (Macroeconomics): Sam
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Short run in the macroeconomics is different from the short run in the microeconomics. In Macroeconomics its the period of time where resources prices are almost constant and inflexible, mostly talking about wages or price of labour.
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long run (macroeconomics) Joker
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Long run is different from microeconomics: it is the period of time when prices of resources (especially wages) change along with the changes in the price level
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unemployment: Lucinda
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refers to people of working age who are actively looking for a job but who are not employed
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Consumer confidence (steve)
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Consumer confidence is a measure of how optimistic consumers are about their future income and the future of economy.
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Household Indebtedness (Carmen)
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Refers to how much money people owe from taking out loans in the past. More debt results in consumers being less likely to spend as they are pressured to pay off their debts.
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Business Confidence (Carmen)
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Refers to how optimistic firms are about their future sales and economic activity. More confidence results in firms being more likely to spend and invest.
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exchange rates
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An exchange rate is the price of one country's currency in terms f another country's currency. (steve)
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Supply Shock
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A supply shock is an unexpected event that changes the supply of a product or commodity, resulting in a sudden change in its price. Supply shocks can be negative (decreased supply) or positive (increased supply). (Kevin)
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Capital Stock
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A capital stock is the common and preferred stock a company is authorized to issue, according to their corporate charter. Capital stock represents the size of the equity position of a firm. (Kevin)
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Recessionary Gap
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Where real GDP is lower than potential GDP due to insufficient Aggregate Demand. Nirvaan
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Inflationary Gap
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Where real GDP is greater than potential GDP due to excess Aggregate Demand. Nirvaan
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Injections into economy (circular flow chart)
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Expenditure that is injected into the economy in forms of government spendings, investments and exports. Xenia
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Consumer Price Index, CPI (Carmen)
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A measure of the cost of living for a typical household, and compares the value of a basket of goods and services in one year with the value of the same basket of goods and services in a base year. A positive change indicates that there is inflation, while a negative change indicates deflation.
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