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17 Cards in this Set
- Front
- Back
Nominal Wage
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the wage measured in current doallars; the dollar amount on a paycheck
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real wage
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the wage in dollars of constant purchasing power; the wage measured in terms of the quantity of goods and services it will buy
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potential output
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the economy's maximum sustainable output, given the supply of resourses, technology and production incentives; the output level when there are no surproses abotu the price level
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natural rate of unemployment
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the unemployment rate when the economy produces its potential output
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short run
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a period during whcih some resource prices especially those for labor are fixed by explicity or implicit agreements
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short run aggregate supply curve
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a curve that shows a direct realtionship between the price level and real GDP supplied in the short run, other things constant
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short run equilibrium
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the price level and real GDP that occur when the aggregate demand curve intersects the short run aggregate supply curve
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expansionary gap
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the amount by whcih ourtpu in the short run exceeds the conomy's potential output
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long run
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a period during whcih wage contracts and resource price agreements can be renegotiated; thare are no surprises about eh economy's actual price level
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long run equilibrium
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the price level and real GDP that occurs when the actual price level equals the expedt price level real GDP supplied equals potential output, and real GDP supplied equals real GDP demandedq
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contractonary gap
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the amount by which acutla output in the short run falls short f the economy's potential output
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long run aggregate supply curve
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a vertical line at the conomy's potential aoutput aggregate supply when there are no surpises about the price level and all resource contracts cna be renegotiated
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coordination failure
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a situation in which workers adn employers fail to achieve and outcome that all would prefer
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supply shocks
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unexpected events that affect the aggregate supply, sometimes only emporarily
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beneficial supply shocks
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unexpected events that icnresase aggregate supply sometiems only temporarily
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adverse supply shocks
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unexpected events that r4educe aggreagae supply, sometiems only temporarily
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hysteresis
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the theory that the natural rate of unemployment depends in part on the recent history of unemployment; high unemployment rates increase tha ntural rate of unemployment
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