Part 2. Matching: Match the Key terms in Column “A” with the definitions in Column “B” by writing the block letter of your choice from Column
“B” in the space provided under “A” and match the definitions in column “B” with the meanings or examples or facts in column “C” by writing
the lower letter case of your choice in the space provided under column “B”.
Column “A”
Column “B”
Column “C”
10. Appreciation
J. A decrease in the value of one currency relative to j. The state of an economy when aggregate (total)
other currencies.
demand equals aggregate (total) supply in the short
K. A curve that shows the quantity supplied of all goods
term.
11. Depreciation
& services(Real GDP) at different price levels, ceteris k. The vertical line that shows the potential of the
panbus.
economy to produce the maximum quantity of goods
L. The condition in the economy when the quantity
and services at “full employment” in the long run.
12. Velocity
demanded of Real GDP = the (short-run) quantity I. The state of an economy when aggregate (total)
supplied of Real GDP. This condition is met where the
demand equals aggregate (total) supply in the long-
aggregate demand curve intersects the short-run
term.
13. Aggregate Supply
aggregate supply curve.
. The total quantity of goods and services producers are
M. The LRAS curve is a vertical line at the level of
willing and able to produce and supply in the entire
Natural Real GDP. It represents the output the economy
economy at different price levels, ceteris paribus.
14. Short-Run
produces when wages and prices have adjusted to their n. The number of times a dollar changes hands in order
Aggregate Supply
final equilibrium levels and when workers do not have
to buy goods and services in a year.
(SRAS) Curve
any relevant misperceptions.
o. The amount of goods & services produced in the
N. The condition that exists in the economy when wages
15. Short-Run
–
economy as it achieves “full employment” in the long
and prices have adjusted to their (final) equilibrium
run
Equilibrium
levels and when workers do not have any relevant
misperceptions. Graphically, long-run equilibrium occurs
P.
A weakening of one currency relative to other
currencies. Example: when the number of units of the
at the intersection of the AD and LRAS curves.
16. Natural Real GDP
national currency required to buy a foreign currency has
O. An increase in the value of one currency relative to
increased in the market.
other currencies.
q. A pictorial representation of the positive or direct
P. The quantity supplied of all goods and services (Real
17. Long-Run
relationship that shows the total quantity goods &
GDP) at different price levels, ceteris paribus
services supplied at different price levels, ceteris
Aggregate Supply
Q. The average number of times a dollar is spent to buy
panbus.
(LRAS) Curve
final goods and services in a year.
r.
A strengthening of one currency relative to other
18. Long-Run
R. The Real GDP that is produced at the natural
currencies. Example: when the number of units of the
Equilibrium
unemployment rate. The Real GDP that is produced
national currency required to buy a foreign currency has
when the economy is in long-run equilibrium
decreased in the market.
