5.1 macro review

policymakers often combine... policy and... policy to influence the economy

the short-run... curve shows a trade-off between... and...

expansionary monetary policy can stimulate the economy in the short run but, according to the... theory of money, it will lead to higher... inflation in the long run

an increase in deficit spending increases the... and often results in an increase in the real interest rate and less investment, or...

more physical or human capital causes economic growth & shifts the LRAS curve to the...

if the economy is slow, they want to speed it up

if the economy's too hot (high inflation), they want to cool it down

pushes economy forward...

lowers unemployment & interest rates (makes spending easier), boosts GDP, & helps businesses

AD shifts right b/c people are buying more stuff

Fed prints more $ or lowers interest rates