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NOMINAL GROSS DOMESTIC PRODUCT: The total market value, measured in current prices, of all goods and services produced within the political boundaries of an economy during a given period of time, usually one year. The key is that nominal gross domestic product is measured in current, or actual prices; the prices buyers actually pay for goods and services purchased. Nominal gross domestic product is also termed current gross domestic product.
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Lesson Contents
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Unit 1: The Concept |
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Unit 2: Two Options |
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Unit 3: The Curves |
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Unit 4: Determinants |
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Unit 5: Connections | |
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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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EFFECTIVE DEMAND A key conceptual notion of Keynesian economics stipulating that the aggregate expenditures on real production is based on existing or actual income rather than the income that would be generated with full employment of resources. Effective demand is embodied in the aggregate expenditures line, which has a positive slope, but a slope of less than one. This concept was proposed by Thomas Robert Malthus in the early 1800s as a counter argument to Say's law found in classical economics and then found new life when John Maynard Keynes developed his theory in the 1930s.
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PINK FADFLY
[What's This?]
Today, you are likely to spend a great deal of time searching for rummage sales wanting to buy either an AC adapter that won't fry your computer or a case for your designer sunglasses. Be on the lookout for telephone calls from former employers.
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John Maynard Keynes was born the same year Karl Marx died.
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"We should never allow ourselves to be bullied by an either-or. There is often the possibility of something better than either of those two alternatives. " -- Mary Parker Follett, management coach
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BIF
Bank Insurance Fund
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