Cards (10)

  • what is short run Econ growth caused by?
    AD shifts right due to an increase in A.D
  • what happens if AD curve shifts right?
    from AD to AD1 there's an increase in output and a decrease in unemployment
  • what does a shift in the AD curve right have an impact on (negative)?
    increases P.L - lack of competitiveness internationally meaning decrease in exports, rise in imports and worsening current account of B.O.P
  • S.R Econ growth
  • what does an increase in A.D mean?
    govt only achieves 2 of the Econ objectives
  • what does a shift in LRAS or (AS) do?
    govt achieves all 4 main objectives at the same time
  • what's an example of a shift in the LRAS curve?
    shifts to LRAS 1- increase output and reduce employment- Price level falls which improves competitiveness- improves balance of Payments
  • what happens if the govt only uses demand-side policies?
    conflict between objectives
  • what do supply-side policies help govt achieve?
    achieve 4 main macro objectives in the long run
  • LRAS