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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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Lesson Contents
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Unit 1: Price Taker |
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Unit 2: Short-Run Output |
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Unit 3: Doing Graphs |
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Unit 4: Long-Run Equilibrium |
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Unit 5: Evaluation | |
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Perfect Competition
- The first unit of this lesson, Price Taker, begins this study with a look at the general structure of a perfectly competitive market.
- In the second unit, Short-Run Output, we take a look at the short-run production decision faced by a perfectly competitive firm based on the cost and revenue numbers.
- The third unit, Doing Graphs, then looks at the short-run production decision faced by a perfectly competitive firm using a graphical analysis of cost and revenue.
- In the fourth unit, Long-Run Equilibrium, we examine the nature of long-run adjustment by a perfectly competition industry when all inputs are variable.
- The fifth and final unit, Evaluation, then closes this lesson by considering the pros and cons of a perfectly competitive industry.
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MONEY FUNCTIONS Any item used as money in an economy automatically takes on four basic functions: (1) medium of exchange, (2) unit of account, (3) store of value, and (4) standard of deferred payment. While "buying and selling" means that money is THE medium of exchange, and by far THE most important function of money, money also performs unit of account, store of value, and standard of deferred payment functions.
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WHITE GULLIBON
[What's This?]
Today, you are likely to spend a great deal of time strolling around a discount warehouse buying club looking to buy either a wall poster commemorating the first day of spring or a lazy Susan for you dining room table. Be on the lookout for infected paper cuts.
Your Complete Scope
This isn't me! What am I?
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Only 1% of the U.S. population paid income taxes when the income tax was established in 1914.
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"There's only one corner of the universe you can be certain of improving and that's your own self. " -- Aldous Huxley, writer
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AR
Average Revenue, Autoregressive
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