From the list on your right select the letter that contains the word, phrase, name, etc that best matches the word, phrase, name, etc listed on the left. I II I A measure of inflation in the prices of all final goods and services produced within the borders of a country Consumers are pessimist about the future A new mother who resigns from her job as a chief economist of a major bank to care for her baby full time Classical view Full employment if cyclical unemployment is equal to zero Not in the labor force Benefits from deflation GDP deflator Explains why SRAS is upward sloping AD declines, SRAS remains unchanged, both price and output decline During recessionary and inflationary times, the economy adjusts to full employment level on its own Focuses on the short-run Multiplier effect I A lender of funds Sticky wages Keynesian view Tradeoff between the unemployment rate and the inflation rate An economy with a combined structural and frictional unemployment rate of 3% Measures the snowball effect of a change in spending on GDP 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. Phillips curve Represents the natural unemployment rate as long as cyclical unemployment rate is less than or equal to 2% Unemployed Underemployed Is hurt by deflation The Consumer Price Index The Aggregator AD declines, SRAS goes up, Price rises, Output stays the same In a self regulating economy, AD will automatically rise to bring the economy out of recession Nominal GDP The LRAS curve