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ADJUSTMENT, LONG-RUN AGGREGATE MARKET: Disequilibrium in the long-run aggregate market induces changes in the price level that restore equilibrium. If the price level is above the long-run equilibrium price level, economy-wide product market surpluses cause the price level to fall. If the price level is below the long-run equilibrium price level, economy-wide product market shortages cause the price level to rise. In both cases long-run equilibrium is restored. Price level changes induce changes in aggregate expenditures but NOT changes in real production. The reason is that long-run aggregate supply is full-employment real production, which is unaffected by the price level.
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ECONOMIC ANALYSIS The process of investigating economic phenomena in a systematic manner. In one sense, this is the heart and soul of the economic discipline. While economists spend an ample time identifying economic concepts, the end result of this discovery process is usually aimed at combining these concepts in such a way as to evaluate or analyze alternative consequences.
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PINK FADFLY
[What's This?]
Today, you are likely to spend a great deal of time surfing the Internet seeking to buy either a T-shirt commemorating the first day of spring or a coffee cup commemorating last Friday (you know why). Be on the lookout for broken fingernail clippers.
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This isn't me! What am I?
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In his older years, Andrew Carnegie seldom carried money because he was offended by its sight and touch.
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"It is the mark of an educated mind to be able to entertain a thought without accepting it." -- Aristotle
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IJIO
International Journal of Industrial Organization
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