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Phillips Curve and Supply Shocks definitions

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Termini in questo insieme (14)

  • Supply Shock
    An unexpected event causing sudden changes in production costs, often leading to shifts in aggregate supply and economic instability.
  • Short Run Aggregate Supply
    A curve showing the relationship between total output and price level, influenced by input costs and subject to sudden shifts.
  • Input Prices
    The costs of resources used by firms, such as gasoline, which directly affect production expenses and supply decisions.
  • GDP
    A measure of total economic output, reflecting the value of all goods and services produced within a country.
  • Price Level
    An index reflecting the average prices of goods and services in an economy, used to gauge inflation.
  • Inflation
    A sustained increase in the general price level, reducing purchasing power and often linked to supply shocks.
  • Unemployment
    The condition where individuals willing and able to work are unable to find jobs, often rising when output falls.
  • Phillips Curve
    A graphical representation showing the inverse relationship between inflation and unemployment in the short run.
  • Short Run Phillips Curve
    A curve illustrating the trade-off between inflation and unemployment, which can shift due to supply shocks.
  • Equilibrium
    A state where economic forces such as supply and demand are balanced, determining output and price levels.
  • Trade-off
    A situation where achieving lower unemployment may result in higher inflation, and vice versa, especially after shocks.
  • Policy Makers
    Individuals or groups responsible for designing strategies to address economic challenges like inflation and unemployment.
  • Aggregate Supply
    The total quantity of goods and services that producers are willing and able to supply at different price levels.
  • Double Jeopardy
    A scenario where the economy faces both rising inflation and unemployment simultaneously, complicating policy responses.