| Disinflation | The term used to describe declines in inflation.
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| Inflation persistence | A term used to describe the phenomenon that when inflation is low one year, it tends to be low the next, and when it is high, it tends to stay high.
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| Inflation shock | A change in the cost of production that shifts the short-run aggregate supply curve.
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| Long-run aggregate supply curve (LRAS) | The quantity of output supplied in the long run at any level of inflation; the LRAS curve is vertical at potential output.
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| Real business-cycle theory | The theory that prices and wages are flexible, so inflation adjusts rapidly, current output always equals potential output, and all business-cycle fluctuations arise from changes in potential output.
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| Short-run aggregate supply curve (SRAS) | The quantity of output supplied in the short run at any level of inflation; the SRAS curve is horizontal at the current level of inflation.
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| Stabilization policy | Monetary and fiscal policies designed to stabilize output and inflation.
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