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BUDGET DEFICIT: An excess of budgetary expenditures over revenues. The federal government is well known for its inclination to operate with a budget deficit. But it is not alone. Consumers also find themselves in this position on many occasions. When a budget deficit occurs, the excess spending is financed through borrowing. For the federal government this involves issuing government securities. For households it typically involves some sort of bank loan, credit card purchase, use of savings (borrowing from thyself), or hitting a friend up for a few bucks.
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Lesson 12: Business Cycles | Unit 1: Instability
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Page: 2 of 26
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Business cycles are irregular, nonperiodic fluctuations in aggregate economic activity. Life is good, then it's bad. It's a roller coaster ride. For example, the Great Depression was the worst economic period in this century. - Unemployment reached 25%.
- Total production declined by about 40%.
- Investment declined by 90%.
During the 1920s, production was up, unemployment was down, life was good, then it got bad.- Although we use the term 'cycle', we don't know how long an expansion or a contraction will last. The economy might expand for a year or it might expand for a decade before it declines.
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AGGREGATE DEMAND DECREASE, SHORT-RUN AGGREGATE MARKET A shock to the short-run aggregate market caused by a decrease in aggregate demand, resulting in and illustrated by a leftward shift of the aggregate demand curve. A decrease in aggregate demand in the short-run aggregate market results in a decrease in the price level and a decrease in real production. The level of real production resulting from the shock can be greater or less than full-employment real production.
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WHITE GULLIBON
[What's This?]
Today, you are likely to spend a great deal of time at a dollar discount store wanting to buy either an AC adapter for your CD player or storage boxes for your family photos. Be on the lookout for slow moving vehicles with darkened windows.
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Francis Bacon (1561-1626), a champion of the scientific method, died when he caught a severe cold while attempting to preserve a chicken by filling it with snow.
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"Inside the ring or out, ain't nothing wrong with going down. It's staying down that's wrong. " -- Muhammad Ali
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AOM
Australian Options Market
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