Aggregate Demand, Aggregate Supply and Macroeconomic Equilibrium.
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Across
The total income received by individuals/households within a country from wages, profits, rents, and other sources over a given period of time.
The view that the LRAS is upward sloping due to institutional factors like minimum wages, unions, etc.
Volume of goods/services purchased from other nations.
Tax levied by the government on personal incomes
Argues rigid wages/prices and unstable expectations can cause output to remain below full employment equilibrium for long periods.
The point where the aggregate demand and aggregate supply curves intersect, representing a balance between what consumers want to buy and what producers are willing to supply at the economy level
Volume of goods/services sold to other nations
The value of total output/production within an economy adjusted for changes in the price level. It measures the physical quantities produced.
The view that the LRAS is vertical at the full-employment level of output in the long run.
The total supply of final goods and services that firms in an economy are willing and able to produce at a given price level and time period.
Perception of business leaders about current/future economic conditions, impacting investment
Down
Assumes wage/price flexibility and rational expectations, so the economy automatically achieves full employment.
Component of aggregate demand: Spending by businesses on capital goods and inventory
Component of aggregate demand: Spending by households on goods and services.
The price paid for a unit of labor service
How optimistic consumers feel about the economy and their personal finances, impacting consumption
Component of aggregate demand: Expenditure by the government on goods, services, and transfer payments.
the total supply of goods and services that firms are willing and able to produce in the short run, when factors of production (like capital or natural resources) are often fixed.
Taxes levied on businesses, impacting their costs and investment
The total output that an economy can produce by fully employing all available resources and technology over the long run.
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