LRAS
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Long run Aggregate Supply curve
vertical
In the AE model, why is it important to know the factors that determine consumption
spending, investment spending, gov purchases, and net exports?
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, Bc they help us understand
-how the level of AE and GDP are determined in the economy
-how equilibrium is determined in the AE model
-the relationship between AE and real GDP
actual investment will be less than planned investment when there is an
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unplanned decrease in inventories
"the unemployment rate increases and the inflation rate falls during recessions"
describes
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the effect of the business cycle on the inflation rate and the unemployment
rate
during recession price level
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rarely falls
When AE is LESS than GDP, inventories will __________, and total employment will __________
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increase
decrease
An increase in autonomous expenditure causes a _________ in equilibrium real GDP
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increase
As a result, firms
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ACCUMULATE large amounts of unplanned inventory & GDP &
employment DECREASE
a rising price level ________ consumption by ________ the real value of household wealth
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decreases
decreasing
vice versa
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Long run Aggregate Supply curve
vertical
In the AE model, why is it important to know the factors that determine consumption
spending, investment spending, gov purchases, and net exports?
Give this one a try later!
, Bc they help us understand
-how the level of AE and GDP are determined in the economy
-how equilibrium is determined in the AE model
-the relationship between AE and real GDP
actual investment will be less than planned investment when there is an
Give this one a try later!
unplanned decrease in inventories
"the unemployment rate increases and the inflation rate falls during recessions"
describes
Give this one a try later!
the effect of the business cycle on the inflation rate and the unemployment
rate
during recession price level
Give this one a try later!
rarely falls
When AE is LESS than GDP, inventories will __________, and total employment will __________
, Give this one a try later!
increase
decrease
An increase in autonomous expenditure causes a _________ in equilibrium real GDP
Give this one a try later!
increase
As a result, firms
Give this one a try later!
ACCUMULATE large amounts of unplanned inventory & GDP &
employment DECREASE
a rising price level ________ consumption by ________ the real value of household wealth
Give this one a try later!
decreases
decreasing
vice versa
