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OTHER THINGS EQUAL: A common assumption used in economic analysis that often goes by the technical Latin term, ceteris paribus. This assumption is used when identifying the relation between two specific variables, such as price and quantity for the law of demand. In so doing, the causal connection between the two variables can be identified. However, economic analysis becomes more interesting and useful when this assumption is relaxed, which makes it possible to examine how these "other things" affect the relation under study.
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Lesson 14: Aggregate Supply | Unit 4: Determinants
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Page: 17 of 20
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- The rather stable, passive nature of the supply side of the aggregate market--at least when compared to the demand side.
- How aggregate supply determinants shift the LRAS and SRAS curves, with an increase in aggregate supply moving rightward and a decrease moving leftward.
- How the LRAS curve shifts from changes in full employment production resulting from changes in the quantity or quality of scarce resources.
- Some of the ways that quantities of labor, capital, land, and entrepreneurship can change.
- How resource quality is primarily changed through technology and education.
- Production cost--especially things like wages and oil prices--as the primary determinant of the SRAS curve.
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M2 The medium-range monetary aggregate for the U.S. economy containing the combination of M1 (currency and checkable deposits) and short-term, small denomination near monies. M2 contains financial assets that either function directly as money for the U.S. economy or can be easily and quickly converted into money. The near monies added to M1 to derive M2 include savings deposits, certificates of deposit, money market deposits, and money market mutual funds. M2 is one of three monetary aggregates tracked and reported by the Federal Reserve System. The other two are designated M1 and M3.
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Al Capone's business card said he was a used furniture dealer.
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"Sometimes when you innovate, you make mistakes. It is best to admit them quickly and get on with improving your other innovations. " -- Steve Jobs, Apple Computer founder
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GEB
Games and Economic Behavior
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