| aggregate demand (AD) curve | Relationship between the amount of goods and services people wish to purchase and the price level.
|
 |
|
|
| aggregate supply (AS) curve | Relationship between the amount of final goods and services produced in an economy and the price level.
|
|
|
|
| classical aggregate supply curve | Vertical AS curve; output equals potential output.
|
|
|
|
| dynamic scoring | The process of incorporating the macroeconomic effects of a tax change into the revenue estimates.
|
|
|
|
| frictional unemployment | Unemployment associated with the movement of workers
in and out of jobs in "normal" times.
|
|
|
|
| Keynesian aggregate supply curve | Horizontal aggregate supply curve.
|
|
|
|
| natural rate of unemployment | Rate of unemployment at which the flows into and
out of the unemployment pool balance; also the point on the augmented Phillips curve at which expected inflation equals actual inflation.
|
|
|
|
| nominal GDP | Value of all final goods and services produced in the economy; not adjusted for inflation.
|
|
|
|
| nominal money supply | Nominal value of bills and coins in circulation; says nothing
about the amount that these bills and coins can purchase.
|
|
|
|
| output gap | Difference between actual GDP and potential GDP.
|
|
|
|
| potential GDP | See potential output.
|
|
|
|
| quantity theory of money | Theory of money demand emphasizing the relation of nominal income to nominal money. Sometimes used to mean a vertical LM curve.
|
|
|
|
| real money supply | Real value of the bills and coins in circulation; equal to the nominal money supply divided by the price level.
|
|
|
|
| speed of price adjustment | Amount of time that it takes prices to fully adjust so that
all markets are in equilibrium and output equals potential output.
|