ECON 410 - Study guides, Class notes & Summaries

Budget Constraint - ANSWERI = pxX + pyY or •y= (I/py) - (px/py) (X) Vertical intercept - ANSWERI/py Horizontal intercept - ANSWERI/px Budget line - ANSWERthe set of all bundles of goods/services that exhausts an individual's income. Both good goods/bad goods - ANSWERdownward sloping IC One bad good and one good good - ANSWERupward sloping IC Good x is bad or good, good y is neutral - ANSWERvertical sloping IC good x is neutral, good y is bad or good - ANSWERhorizo...

short run - ️️-many prices are sticky at a predetermined level -the economy behaves very differently when prices are sticky IS-LM model of aggregate demand and supply - ️️what most mainstream economists use to think about the economic fluctuations and policies to stabilize the economy, shows how aggregate demand output are determined quantity equation - ️️MV=PY -implies an inverse relationship between both sides downward sloping AD curve - ️️-increase in the price level ca...