Measures of Output, Prices, and Employment

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• short-run aggregate supply curve

  However if the economy is approaching full-employment, the amount of spare capacity available to raise output will have fallen.

• Expansionary Fiscal Policy: AD and AS Curves

  s average costs of production do not change as their output changes. In such a situation, there will not be an increase in prices but output will increase leading to higher GDP and higher levels of employment.

• Macroeconomic Questions

  A positive demand shock can cause output and employment to rise at the same time. Another explanation: Assume an increase in prices. At the nominal wage, firms demand more labor.

• Long and Short Run Aggregate Supply Curves

  This means that resources, especially labor, have full employment. Flexible prices mean that full employment is achieved and maintained, regardless of the price level.

• Fiscal policy effects

  The aggregate supply curve has two segments: a segment that is positively sloped up to the full employment level of output and a segment that becomes vertical at the full employment level of output.

• Should the Federal Reserve only focus on inflation?

  And that in many cases you can not affect prices without also affecting output and employment. Similarly you can not always affect output and employment without affecting prices.

• effects of natural disasters

  One of the costs of unsustainably high output growth - an economic boom - and the resultant upward pressure on costs and prices, has been large falls in output and employment. Thus it also leads to greater instability in the economic conditions.

• Reasons for economic output above capacity

  167093 You observe that output is above full-employment output. You observe that output is above full-employment output. Politicians are arguing about the possible reasons. One party claims that this is due to a drop in world oil prices.

• Inflation

  , output, and prices of goods and services.