Recurring increases and decreases in the level of economic activity over periods of time.
Equilibrium Real Output
The level of real GDP at which the aggregate demand curve and aggregate supply curve intersect.
Equilibrium Price Level
The price level at which the aggregate demand curve and aggregate supply curve intersect.
Long-Run Aggregate Supply Curve
The aggregate supply curve associated with a period of time in which both input and output prices are fully flexible.
Short-Run Aggregate Supply Curve
An aggregate supply curve relevant to a time period in which output prices are flexible, but input prices are sticky.
Immediate-Short-Run Aggregate Supply Curve
The aggregate supply curve associated with a period of time in which neither input nor output prices respond to changes in the level of spending or production.
A schedule or curve that shows the total quanity of goods and services supplied (produced) at different price levels.
A schedule or curve that shows the total quanity of goods and services demanded (purchased) at different price levels.
Aggregate Demand-Aggregate Supply (AD-AS) Model
The macroeconomic model that uses aggregate supply and aggregate demand to determine and explain the price level and level of real domestic output.
Real Interest Rate
The percentage increase in purchasing power that a borrower pays a lender; the nominal interest rate less then expected rate of inflation.
Persons 16 years and older who are not in insituations and who are either employed or unemplyed and seeking work.
A situation where prices of goods and services are slow to respond to change in supply and demand.
The purchasing power of nominal income; the amount of goods and services that nominal income can buy.
Increases in the price level (inflation) caused by sharp rises in the cost of key resources.
Consumer Price Index (CPI)
An index that compares the price of a market basket of consumer goods and services in one period with the price of the same 9or highly similar) market basket in a base period.
Unemployment that is associated with the recessionary phase of a business cycle.
Unemployment that is associated with a mismatch between available jobs and the skills or locations of those unemployed.