Long Run Aggregate Supply

Wages and Resource Costs will increase as price levels increase.

Measures the effect of the economy on inflation and unemployment with an inverse relationship

No tradeoff between inflation and unemployment, represented by a vertical line at the NRU.

Government spending might cause unintended effects that weaken the impact of the policy.

Wages and Resource Costs will not increase as price levels increase.

Short Run Aggregate Supply

Wages and Resource Costs will not increase as price levels increase.

Wages and Resource Costs will increase as price levels increase.

Measures the effect of the economy on inflation and unemployment with an inverse relationship

No tradeoff between inflation and unemployment, represented by a vertical line at the NRU.

Government spending might cause unintended effects that weaken the impact of the policy.

Gross Domestic Product

The dollar value of all goods and services produced within a country’s borders in a given year.

Prices increasing at slower rates.

Workers that are able and willing to work and actively looking for a job but aren’t working.

Parts that go into the production of the final good.

All the spending on final goods and services produced in a given year.

Parts that go into the production of the final good.

Prices increasing at slower rates.

Workers that are able and willing to work and actively looking for a job but aren’t working.

The dollar value of all goods and services produced within a country’s borders in a given year.

All the spending on final goods and services produced in a given year.

Prices increasing at slower rates.

Workers that are able and willing to work and actively looking for a job but aren’t working.

Parts that go into the production of the final good.

The dollar value of all goods and services produced within a country’s borders in a given year.

Prices increasing at slower rates.

Workers that are able and willing to work and actively looking for a job but aren’t working.

Parts that go into the production of the final good.

The dollar value of all goods and services produced within a country’s borders in a given year.

All the spending on final goods and services produced in a given year.

Workers that are able and willing to work and actively looking for a job but aren’t working.

Prices increasing at slower rates.

Parts that go into the production of the final good.

The dollar value of all goods and services produced within a country’s borders in a given year.

All the spending on final goods and services produced in a given year.

Frictional Unemployment

Temporary unemployment or being between jobs but have transferable skills.

Unemployment caused from a recession.

Frictional plus structural unemployment. Unemployment that exists when the economy is healthy and growing.

People who are no longer looking for a job because they have given up.

Changes in the labor force make some skills obsolete and job loss is permanent.

Structural Unemployment

Changes in the labor force make some skills obsolete and job loss is permanent.

Unemployment caused from a recession.

Temporary unemployment or being between jobs but have transferable skills.

Frictional plus structural unemployment. Unemployment that exists when the economy is healthy and growing.

People who are no longer looking for a job because they have given up.

Cyclical Unemployment

Unemployment caused from a recession.

Temporary unemployment or being between jobs but have transferable skills.

Frictional plus structural unemployment. Unemployment that exists when the economy is healthy and growing.

People who are no longer looking for a job because they have given up.

Changes in the labor force make some skills obsolete and job loss is permanent.

Natural Rate of Unemployment

Frictional plus structural unemployment. Unemployment that exists when the economy is healthy and growing.

Unemployment caused from a recession.

Temporary unemployment or being between jobs but have transferable skills.

People who are no longer looking for a job because they have given up.

Changes in the labor force make some skills obsolete and job loss is permanent.

People who are no longer looking for a job because they have given up.

Unemployment caused from a recession.

Temporary unemployment or being between jobs but have transferable skills.

Frictional plus structural unemployment. Unemployment that exists when the economy is healthy and growing.

Changes in the labor force make some skills obsolete and job loss is permanent.

The point at which a recovery period slows down and begins to move into a recession.

Someone who wants more hours but can’t get them but is still considered employed.

Period of economic downturn when output and employment are falling.

The point at which a recession begins to improve and move into a period of recovery.

Period of economic upturn when output and employment are rising.