Unformatted text preview: Chapter 9 – Terms & Concepts
Chapter 9 – Terms & Concepts
15. To be able to name the 4 key markets
To find equilibrium in the G & S market, the loanable funds and the resource market & to understand how changes in the equilibrium affect the P & Q in each market
The Flow of Funds (Household & Business sector only)
Why the AD curve slopes downward and to the right.
How a change in the average price level affects US imports & exports.
Short run aggregate supply (Profit!!) Long run aggregate supply (Capacity!! Based on PPC)
Why is the LRAS curve vertical?
Relationship between the G & S market, the business cycle graph and the production possibilities curve.
Relationship between potential and actual GDP in all three graphs mentioned in no. 10.
Keynesian fiscal policy
Fiscal policy in general
Why Keynes is ok with running budget deficits (and therefore gov’t borrowing) during times of recession
Why politicians like Keynes! ...
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- Fall '10
- run aggregate supply, Keynesian Fiscal Policy