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EXCHANGE RATES, AGGREGATE DEMAND DETERMINANT: One of several specific aggregate demand determinants assumed constant when the aggregate demand curve is constructed, and that shifts the aggregate demand curve when it changes. An increase in exchanges rates causes an increase (rightward shift) of the aggregate curve. A decrease in the exchanges rates causes a decrease (leftward shift) of the aggregate curve. Other notable aggregate demand determinants include interest rates, the money supply, inflationary expectations, consumer confidence, and the federal deficit.

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FULL EMPLOYMENT

The state that occurs when all of the economy's resources are engaged in the production of output. In practice, an economy is considered to be at full employment when the unemployment rate is around 5 to 5 1/2 percent and the capacity utilization rate of capital is about 85 percent. This is one of the five economic goals and three macroeconomic goals.

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