ECN 211 Final Exam Terms | Questions and Correct Answers | Latest Update 2024/2025

ECN 211 Final Exam Terms | Questions and Correct Answers | Latest Update 2024/2025 Demand-Pull Inflation - Answer -increases in the price level (inflation) resulting from an excess of demand over output at the existing price level, caused by an increase in aggregate demand Cost-Push Inflation - Answer -increases in the price level (inflation)resulting from an increase in resource costs (for example, raw material prices) and hence in per unit production costs; inflation caused by reductions in aggregate supply Wealth Effect - Answer -A change in the real value of wealth that causes spending to change when the level of prices changes Interest Rate Effect - Answer -A change in interest rates that causes investment and therefore aggregate expenditures to change as the level of prices changes International Trade Effect - Answer -A change in aggregate expenditures resulting from a change in the domestic price level that changes the price of domestic goods relative to that of foreign goodsAggregate Demand Curve - Answer -A curve that shows the different equilibrium levels of expenditures on domestic output at different levels of prices Aggregate Supply Curve - Answer -A curve that shows the amount of real GDP produced at different price levels