Glossary
Chapter 9: Macroeconomic Equilibrium: Aggregate Demand and Supply
aggregate demand curve a curve that shows the different equilibrium levels of expenditures at different price levels aggregate supply curve a curve that shows the amount of production at different price levels cost-push inflation inflation caused by rising costs of production demand-pull inflation inflation caused by increasing demand for output interest rate effect a change in interest rates that causes investment and therefore aggregate expenditures to change as the level of prices changes international trade effect the change in aggregate expenditures resulting from a change in the domestic price level that changes the price of domestic goods in relation to foreign goods long-run aggregate supply curve (LRAS) a vertical line at the potential level of GDP wealth effect a change in the real value of wealth that causes spending to change when the price level changes
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