Aggregate supply: The total quantity of goods and services produced in an economy (real GDP)

over particular time at different price levels

Monetarist (New Classical): Concept of free/competitive market equilibrium, Thinking about the
economy as trending towards full employment/potential GDP through market forces - in the long
run, economy is at full potential and employment and government intervention is not
needed

Keynesian: Showed that it is possible for economies to remain in a position of short term for
long periods of time, Therefore, there is an active role in the government

Inflation: The sustained increase in the general price level of a good or service within a market

Deflation: The sustained decrease in the general price level of a good or service within a market

Unemployment Rate: The percentage of people not in the labor force who are of age and
cannot find a job

Purchasing Power: The value of a currency based on the goods it can buy

Hyperinflation: When inflation rate is greater than 50%

GDP: The market value of all final goods and services produced in a country over a time period.

Aggregate demand: is the total output or Real GDP, that buyers in an economy want to buy at
different possible price levels