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A POSTERIORI: A conclusion reached through logical reasoning based on facts and observations about the real world. This notion is closely related to the scientific verification of hypotheses and the identification of principles. A similar sounding, but opposite term is a prior, which is a unverified presumption made before an analysis is undertaken. For example, in the study of economics of crime you might assume, a priori, that people are basically "good", and conclude, a posteriori, that people are more likely to commit crimes when the threat of capture and conviction is lower.

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Lesson Contents
Unit 1: Instability
  • What It Is
  • Fluctuations
  • Unit 1 Summary
  • Unit 2: Extension
  • Instability
  • Self-Correction
  • Unit 2 Summary
  • Unit 3: Basic Shifts
  • AD Shifts
  • AD Increase: Long Run
  • AD Decrease: Long Run
  • AD Increase: Short Run
  • AD Decrease: Short Run
  • Unit 3 Summary
  • Unit 4: Complex Shifts
  • AD
  • AD Increase
  • AD Decrease
  • SRAS
  • SRAS Increase
  • SRAS Decrease
  • Unit 4 Summary
  • Unit 5: Synthesis
  • Business Cycles
  • Unit 5 Summary
  • Course Home
    Aggregate Shocks

    In this lesson we use the aggregate market model to analyze assorted disruptions that cause shifts of the aggregate demand, short-run aggregate supply, and long-run aggregate supply curves. The reason for doing this, of course, is to explain and understand macroeconomic activity, especially business cycle instability that causes inflation and unemployment.

    • The first unit of this lesson reviews the aggregate market and examines how it is affected macroeconomic instability.
    • In the second unit, we take and look at assorted demands on both the demand side and supply side of the aggregate market that cause shorts to the aggregate market.
    • We then move into an analysis of six basic shifts involving increases and decreases in the aggregate demand, short-run aggregate supply, and long-run aggregate supply curves.
    • The fourth unit builds on these six basic shifts to examine four complex shifts in which recessionary and inflationary gaps trigger self-correction adjustments of the short-run aggregate supply.
    • We close out this lesson in the fifth with a thought or two on how the aggregate market can be used to explain business cycle fluctuations.

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    TOTAL FACTOR COST, PERFECT COMPETITION

    The opportunity cost incurred by a perfectly competitive firm when using a given factor of production to produce a good or service. This is the total cost associated with the use of a particular resource or factor of production--it is the total cost of the factor. For a perfectly competitive firm, the price paid is constant and total factor cost increases at a constant rate. Total factor cost is predominately used in the analysis of the factor market. Two derivative factor cost measures are average factor cost and marginal factor cost.

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    APLS

    BROWN PRAGMATOX
    [What's This?]

    Today, you are likely to spend a great deal of time strolling through a department store hoping to buy either a coffee cup commemorating last Friday (you know why) or a wall poster commemorating the first day of spring. Be on the lookout for mail order catalogs with hidden messages.
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    This isn't me! What am I?

    A scripophilist is one who collects rare stock and bond certificates, usually from extinct companies.
    "Think not of yourself as the architect of your career but as the sculptor. Expect to have to do a lot of hard hammering and chiseling and scraping and polishing. "

    -- B. C. Forbes, founder, Forbes magazine

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