Unit 3 ECON

Front

Aggregate Demand (AD) is made up of the total spending on goods and services in an economy.

Back

Aggregate demand differs from regular demand as it encompasses the total demand for all goods and services in an economy.

Front

A shift in Aggregate Demand (AD) can be caused by changes in consumer spending, investment, government spending, and net exports.

Back

An increase in consumer income typically leads to an increase in Aggregate Demand (AD).

Front

The hope of a healthy economy can increase Aggregate Demand (AD).

Back

A decrease in exports generally leads to a decrease in Aggregate Demand (AD).

Front

An increase in government defense funding can increase Aggregate Demand (AD).

Back

An increase in imports usually results in a decrease in Aggregate Demand (AD).

Front

The Short Run Aggregate Supply (SRAS) curve is upward sloping because of "sticky" wages and prices.

Back

A shift in Short Run Aggregate Supply (SRAS) can be caused by changes in input prices, productivity, and government policies.

Front

A decrease in the price of oil can increase Short Run Aggregate Supply (SRAS).

Back

An increase in corporate taxes typically decreases Short Run Aggregate Supply (SRAS).

Front

The development of faster technology can increase Short Run Aggregate Supply (SRAS).

Back

An increase in government subsidies can increase Short Run Aggregate Supply (SRAS).

Front

Long Run Aggregate Supply (LRAS) differs from Short Run Aggregate Supply (SRAS) because it is "fully flexible" and not affected by price levels.

Back

Front

In the long run, output (GDPₐ) tends to stabilize at the full employment level.

Back

In the long run, output (GDPₐ) tends to stabilize at the full employment level.

Front

The LRAS line represents the economy's potential output at full employment, where all resources are utilized efficiently.

Back

The LRAS line represents the economy's potential output at full employment, where all resources are utilized efficiently.