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Aggregate Demand Aggregate Supply Types of Unemploy- ment Nominal GDP Real GDP PPF/PPC $100 $100 $100 $100 $100 $100 $200 $200 $200 $200 $200 $200 $300 $300 $300 $300 $300 $300 $400 $400 $400 $400 $400 $400 $500 $500 $500 $500 $500 $500

- $100 What does aggregate demand represent? C1-$100 the total demand of goods and services in an economy

- $200 the aggregate supply curve What extra information do you need to maximize the usefulness of the aggregate demand curve? C1-$200 the aggregate supply curve

- $300 What is the slope of the aggregate demand curve? Downward

- $400 What are the shifters of aggregate demand? C1-$400 1) changes in consumer spending 2) changes in investment 3) changes in government spending 4) changes in net exports

- $500 Which way does the expansionary policy shift the aggregate demand curve? C1-$500 Left

- $100 What does the aggregate supply curve show? total supply of goods and services in an economy

- $200 What is the slope of the short-run aggregate supply curve? Upward

- $300 What is the slope if the long-run aggregate supply curve? Vertical

- $400 What is the slope of the short-run aggregate supply curve? 1/a

- $500 Based on the short-run aggregate supply curve, what happens when price level increases? C2-$500 Output increases as well

- $100 What is inflation? A decrease in purchasing power of the dollar

- $200 What is the consequence of a small amount of inflation over the course of many years? C3-$200 A large increase in price level

- $300 What type of uneployment occurs becuase of the buisness cycle? Cyclical unemployment

- $400 What type of unemployment occurs because people are between jobs? C3-$400 Frictional unemployment

- $500 How do you calculate unemployment? unemployment/sum of employed & unemployed

- $100 What is nominal GDP? the GDP evaluated at the C4-$100 the GDP evaluated at the current market prices

Quantity and changes in prices - $200 What two changes does nominal GDP capture? C3-200 Quantity and changes in prices

- $300 What is the difference between nominal GDP and real GDP? Change in price level from base year to current year

- $400 Which GDP (nominal or real) is more useful when comparing sheer output? C3-$400 Nominal

- $500 How do you calculate the nominal GDP? C3-$500 C+I+G+Xn

- $100 What is real GDP? measure that reflects the values and services produced in one year and it is adjusted to inflation

- $200 Why is real GDP better than nominal GDP? C4-$200 it accounts for changes in price level and presents a more accurate figure

- $300 What two elements does real GDP account for that nominal doesn't? C4-$300 inflation & deflation

- $400 What is real GDP not influenced by? C4-$400 changes in prices

- $500 How do you calculate real GDP? C4-$500 GDP/inflation

- $100 Why are PPCs concave? because of distribution of resources to the production of goods and services isn't equal

- $200 What basic principle is the PPC demonstrating? that all resources in an economy are at use and that more than one good can be produced when there is less of the other product being produced

- $300 What important information does the PPC help to determine? the quantity of the production of a nonesstial item without disturbing the production of thee essential item in that economy

- $400 What can we conclude when there is a shift outwards in the PPC? there is a growth in the economy

- $500 What does an inward shift in the PPC indicate? the economy is shrinking due to a decline in the resources and production capability