Macroeconomics

Aggregate supply curve:

The relationship be-

tween the price level and the aggregate quantity of

output firms produce.

Animal spirits:

Exogenous and perhaps self-

fulfilling waves of optimism and pessimism about the

state of the economy that, according to some econo-

mists, influence the level of investment.

Appreciation:

A rise in the value of a currency rel-

ative to other currencies in the market for foreign

exchange. (Cf. depreciation.)

Arbitrage:

The act of buying an item in one mar-

ket and selling it at a higher price in another market

in order to profit from the price differential in the

two markets.

Automatic stabilizer:

A policy that reduces the

amplitude of economic fluctuations without regular

and deliberate changes in economic policy; for

glossary

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