15.21: Glossary: Policy Application
- Page ID
- 84676
\( \newcommand{\vecs}[1]{\overset { \scriptstyle \rightharpoonup} {\mathbf{#1}} } \) \( \newcommand{\vecd}[1]{\overset{-\!-\!\rightharpoonup}{\vphantom{a}\smash {#1}}} \)\(\newcommand{\id}{\mathrm{id}}\) \( \newcommand{\Span}{\mathrm{span}}\) \( \newcommand{\kernel}{\mathrm{null}\,}\) \( \newcommand{\range}{\mathrm{range}\,}\) \( \newcommand{\RealPart}{\mathrm{Re}}\) \( \newcommand{\ImaginaryPart}{\mathrm{Im}}\) \( \newcommand{\Argument}{\mathrm{Arg}}\) \( \newcommand{\norm}[1]{\| #1 \|}\) \( \newcommand{\inner}[2]{\langle #1, #2 \rangle}\) \( \newcommand{\Span}{\mathrm{span}}\) \(\newcommand{\id}{\mathrm{id}}\) \( \newcommand{\Span}{\mathrm{span}}\) \( \newcommand{\kernel}{\mathrm{null}\,}\) \( \newcommand{\range}{\mathrm{range}\,}\) \( \newcommand{\RealPart}{\mathrm{Re}}\) \( \newcommand{\ImaginaryPart}{\mathrm{Im}}\) \( \newcommand{\Argument}{\mathrm{Arg}}\) \( \newcommand{\norm}[1]{\| #1 \|}\) \( \newcommand{\inner}[2]{\langle #1, #2 \rangle}\) \( \newcommand{\Span}{\mathrm{span}}\)\(\newcommand{\AA}{\unicode[.8,0]{x212B}}\)
- aggregate demand (AD)
- the amount of total spending on domestic goods and services in an economy
- aggregate supply (AS)
- the total quantity of output (i.e. real GDP) firms will produce and sell
- aggregate demand (AD) curve
- the total spending on domestic goods and services at each price level
- aggregate supply (AS) curve
- the total quantity of output (i.e. real GDP) that firms will produce and sell at each price level
- aggregate demand/aggregate supply model
- a model that shows what determines total supply or total demand for the economy, and how total demand and total supply interact at the macroeconomic level
- full-employment GDP
- another name for potential GDP, when the economy is producing at its potential and unemployment is at the natural rate of unemployment
- long run aggregate supply (LRAS) curve
- vertical line at potential GDP showing no relationship between the price level for output and real GDP in the long run
- potential GDP
- the maximum quantity that an economy can produce given full employment of its existing levels of labor, physical capital, technology, and institutions
- short run aggregate supply (SRAS) curve
- positive short run relationship between the price level for output and real GDP, holding the prices of inputs fixed
CC licensed content, Original
- Macroeconomics Chapter 11.2. Authored by: OpenStax. Provided by: Rice Univeristy. Located at: http://cnx.org/contents/QGHIMgmO@10.235:qPYFpWfb@10/Building-a-Model-of-Aggregate-. License: CC BY: Attribution