Chapter 16 - Macroeconomic equilibrium
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6 terms
Terms | Definitions |
|---|---|
 Macroeconomic equilibrium | the equilibrium level of national income is where aggregate demand is equal to aggregate supply. |
| Short-run equilibrium | where aggregate demand is equal to short-run agggregate supply. |
| Long-run equilibrium | where aggregate demand is equal to long-run aggregate supply. |
| Inflationary gap | Where the economy is in equilibrium at a level of output that is greater than the full employment level of output. |
| Deflationary gap | where the economy is in equilibrium at a level of output that is less than the full employment level of output. |
| "purely inflationary" | there is no increase in output and the only change is an increase in the price level. |
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