1. Aggregate demand
2. Real-balances effect
4. Interest-rate effect
5. Aggregate supply
7. Short-run aggregate supply curve
8. Menu costs
9. Long-run aggregate
10. Equilibrium price
( ) The amount of total spending on domestic goods and services in an
( ) Where there is neither a shortage nor a surplus and no tendency for
the price to rise or fall.
( ) As the price level declines, the purchasing power of money increases.
( ) Shows the total quantity of output that firms will produce and sell
where input prices are fully responsive to changes in the price level.
( ) A lower price level will make domestically produced goods less
expensive relative to foreign goods.
( ) The costs of changing prices, like the costs of changing prices at
( ) A lower price level will reduce the demand for money and lower the
real interest rate, which will stimulate additional purchases.
( ) Shows the total quantity of output that firms will produce where input
prices do not change in response to changes in the price level.
( ) The total quantity of output (i.e. real GDP) firms will produce and sell.
( ) The average output per worker during a specific time period.
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