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AA-Ch 10-Terms&

AA-Ch 10-Terms& - Terms& Concepts 1 Since we...

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Unformatted text preview: 11/10/2009 Terms & Concepts: 1. Since we have both a SRAS and LRAS, we will have 2 2. equilibriums…both a SR and a LR When we are in LR equilibrium 1. 2. 3. 4. Actual GDP = Potential GDP (about 3% GR) Actual unemployment rate = NRU (about 5%) All three curves intersect at the same place LRAS, SRAS and AD are all equal 1. 2. 3. 4. 5. Changes in real wealth in real wealth Changes in the real interest rate Changes in expectations (about future direction of the economy) Changes in the expected rate of inflation Changes in income abroad 1. Changes in resource prices (or changes in the cost of Changes production) production) Changes in the expected rate of inflation Supply shocks 3. Factors that shift AD 4. Factors that shift AS 2. 3. 1 ...
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