vocab

• Aggregate demand (AD) curve

  A curve showing combinations of real GDP and the price level that make desired aggregate expenditure equal to actual national income
• Aggregate demand shock


  Any event that causes a shift in the aggregate demand (AD) curve
• Aggregate supply (AS) curve

  A curve showing the relation between the price level and the quantity of aggregate output supplied, assuming constant factor prices and technology
• Aggregate supply shock


  Any shift in the aggregate supply (AS) curve caused by an exogenous force
• Unit cost

  Cost per unit of output, equal to total cost divided by total output