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RECOGNITION LAG: In the context of economic policies, the time between a shock to the economy and realization that the shock has occurred. This is one of several policy lags that limit the effectiveness of stabilization policies designed to correct business-cycle fluctuations. This is also one of two inside lags. The other is an implementation lag. Also termed identification lag, the recognition lag emerges due to the time needed to measure economic activity. While the lag is generally positive, it actually can be negative through accurate forecasting techniques. When negative policies can be undertaken to correct a problem before it occurs.
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Lesson 11: Circular Flow | Unit 1: Basic Flow
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Page: 5 of 22
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Topic:
The Payment Flow
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The payment flow goes in the opposite direction of the physical flow. A physical commodity goes one direction through markets and payment goes the other.- The household sector buys production from the business sector (counter-clockwise flow) in exchange for payment (clockwise flow) through product markets.
- The business sector buys resources from the household sector (counter-clockwise flow) in exchange for payment (clockwise flow) through factor markets.
- Revenue received by the business sector for selling goods is used to pay the factors of production.
- Factor payments become income used by household sector to buy production from the business sector.
- The circular flow makes about six cycles around the economy each year.
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MARGINAL FACTOR COST CURVE A curve that graphically represents the relation between marginal factor cost incurred by a firm for hiring an input and the quantity of input employed. A profit-maximizing firm hires the quantity of input found at the intersection of the marginal factor cost curve and marginal revenue product curve. The marginal factor cost curve for a firm with no market control is horizontal. The marginal factor cost curve for a firm with market control is positively sloped and lies above the average factor cost curve.
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RED AGGRESSERINE
[What's This?]
Today, you are likely to spend a great deal of time at the confiscated property police auction looking to buy either clothing for your pet dog or an ink cartridge for your printer. Be on the lookout for the last item on a shelf.
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A scripophilist is one who collects rare stock and bond certificates, usually from extinct companies.
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"It takes generosity to discover the whole through others. If you realize you are only a violin, you can open yourself up to the world by playing your role in the concert. " -- Jacques Yves Cousteau, marine explorer
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BCUA
Business Computers Users Association
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