Chapter 12 matching vocabulary

1.  Aggregate demand

2.  Real-balances effect

3.  Foreign-purchases     

           effect

4. Interest-rate effect    

5.  Aggregate supply

6.  Productivity

7.   Short-run aggregate supply curve

8.  Menu costs

9.  Long-run aggregate

       supply curve

10.  Equilibrium price

          level

(     )  The amount of total spending on domestic goods and services in an

          economy.

(     )  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

          Publix.

(     )  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.