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EUROPEAN COMMISSION: The executive body of the European Union that is charged with initiating Union-wide regulations. This is as close as the European Union has come to a centralized "federal" government comparable to that in the United States. It, however, has not achieved the status. The 15 national members of the European Union still retain a significant degree of autonomy.

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Lesson 15: Aggregate Market | Unit 4: Self Correction Page: 17 of 22

Topic: Recessionary Gap <=PAGE BACK | PAGE NEXT=>

The aggregate market can automatically reach long-run equilibrium by closing a recessionary gap.

Key points:

  • Short-run equilibrium is at the intersection of the AD and the SRAS (SRo) curves.
  • The initial short-run price level is Po, and real production is Qo.
  • Short-run equilibrium is to the left of the full employment production, Qf.
  • We have a recessionary gap.
  • As wages fall, production cost decreases which increases short-run aggregate supply.
  • The SRAS curves shift to reach the full employment level at the intersection of the LRAS and AD curves.

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AVERAGE PHYSICAL PRODUCT

The quantity of total output produced per unit of a variable input, holding all other inputs fixed. Average physical product, usually abbreviated APP, is found by dividing total physical product by the quantity of the variable input. Average product, which more often goes by the shorter name average product (AP), is one of two measures derived from total physical product. The other is marginal physical product.

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APLS

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Today, you are likely to spend a great deal of time at an auction wanting to buy either a cell phone case or a pair of designer sunglasses. Be on the lookout for strangers with large satchels of used undergarments.
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The New York Stock Exchange was established by a group of investors in New York City in 1817 under a buttonwood tree at the end of a little road named Wall Street.
"It is not fair to ask of others what you are unwilling to do yourself. "

-- Eleanor Roosevelt, diplomat, activist

LAD
Least Absolute Deviations
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