March 18, 2018 

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AMORTIZATION: The process of paying off a debt liability and accrued interest through a series of equal, periodic payments. Car loans and mortgages are two debts commonly paid off through amortization. Your monthly car payment, for example, partially pays for interest accrued on the outstanding balance and partly reduces that balance. Because one payment reduces the outstanding balance, each subsequent payment has a smaller portion for interest. If the proper amortization schedule has been calculated, your loan will be paid off with the last payment.

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Lesson Contents
Unit 1: The Concept
  • What It Is
  • Price Level
  • Unit 1 Summary
  • Unit 2: Two Options
  • Time Periods
  • Long Run
  • Short Run
  • Unit 2 Summary
  • Unit 3: The Curves
  • Long Run
  • Short Run
  • Market Supply
  • Unit 3 Summary
  • Unit 4: Determinants
  • Stability
  • Long-Run Supply
  • Quantity of Resources
  • Quality of Resources
  • Short-Run Supply
  • Unit 4 Summary
  • Unit 5: Connections
  • Self Correction
  • Policies
  • Unit 5 Summary
  • Course Home
    Aggregate Supply

    In much the same way that the market supply lesson parallels the market demand lesson, this lesson on aggregate supply parallels the aggregate demand lesson. Aggregate supply however, is somewhat more involved that market supply, in particular, because aggregate supply is separated into two relations -- on for the short run and one for the long run. This lesson examines the relation between the price level and real production and the determinants that cause a change in aggregate supply, with a close eye on the differences between aggregate supply in the short run and the long run.

    • This lesson begins with an introduction to the aggregate supply half of the aggregate market in the first unit.
    • The second unit then explores the different aggregate supply relations that exist between the price level and real production in the short run and the long run.
    • The third unit introduces the short run aggregate supply curve and the long run aggregate supply curve which capture these two alternative relations.
    • We think pick up the keep curve shifting determinants of aggregate supply in the fourth unit, especially the resource quantity, resource quality, and resource prices.
    • The fifth unit wraps up this lesson with a discussion of the self-correction mechanism that relies on changes in the aggregate supply and how this relates to business cycle stabilization.

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    The willingness and ability to sell a range of quantities of a good at a range of prices, during a given time period. Supply is one half of the market exchange process--the other is demand. This supply side of the market draws inspiration from the limited resources dimension of the scarcity problem.

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    The first "Black Friday" on record, a friday marked by a major financial catastrophe, occurred on September 24, 1869 -- A FRIDAY -- when an attempted cornering of the gold market induced a financial crises and economy-wide depression.
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