a period of slow economic growth and high unemployment (stagnation) while prices rise (inflation)
Why is even a small change in the GDP gap significant?
The amount of lost production and income can be enormous.
How can a healthy economy help society deal better with problems such as crime and family instability?
people have jobs and can provide for themselfs and families.
Aggregate Supply Curve
shows the quantity of domestic product that is supplied at each possible value of the price level
occurs when the quantity of real GDP demanded equals the quantity of real GDP supplied at the point of intersection of the AD curve and the AS curve.
The federal government efforts to keep the economy stable by increasing or decreasing taxes and government spending
Theory based on the principles of John Maynard Keynes, stating that government spending should increase during business slumps and be curbed during booms.
changes in fiscal policy that stimulate aggregate demand when the economy goes into a recession without policymakers having to take any deliberate action
program that gives payments to people who have lost their jobs until they find work again
policies designed to stimulate output and lower unemployment by increasing production rather than demand.
If tax rates rise beyond a certain level they discourage economic growth, thereby reducing government revenues
What are the 3 approaches that policymakers use to reach economic stability?
discretionary, passive or structural.
What is the basic principle of monetarism?
Variations in unemployment and the rate of inflation are usually caused by changes in the supply of money.
person who has been given written authorization from a customer to make trading decisions for the customer
Name 4 causes of disagreements amongst economists
different criteria, different eras, monetarist, supply-side policies.
How do economic theories reflect a certain time in history?
rules are made for the economics at the time.