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PERFECT COMPETITION, REALISM: Perfect competition is an idealized market structure that does NOT exist in the real world. While some real world industries might come relatively close to one or two of the four key characteristics of perfect competition, none matches all four sufficiently that they can be declared PERFECTLY competitively. Some industries come close on the large number of small firms and the identical product characteristics. A few industries have relatively good, although not perfect, information about prices and technology. However, almost all industries fall far short of the perfect mobility characteristics.
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Lesson 16: Aggregate Shocks | Unit 3: Basic Shifts
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Page: 11 of 21
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Topic:
AD Decrease: Short Run
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The short-run equilibrium is given by the intersection of the negatively sloped AD curve and the positively-sloped SRAS.- A decrease in AD and results in a new short-run equilibrium.
- At the new equilibrium, both real production and the price level decrease.
- Real production can decrease below full employment -- in the short run.
- This shift gives us an intermediate point from one long-run equilibrium to another.
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MONEY MARKET DEPOSITS Interest-paying bank accounts maintained by traditional commercial banks, credit unions, savings and loan associations, and mutual savings banks that pay higher interest rates than standard savings accounts, but with minimum balance requirements and limited check writing capabilities. Money market deposit accounts were developed by banks in response to money market mutual funds offered by mutual fund companies. These deposits are typically considered a type of savings deposits, along with passbook accounts and share accounts. Money market deposits, along with these other savings deposits and assorted near monies, are added to M1 to derive M2.
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Mark Twain said "I wonder how much it would take to buy soap buble if there was only one in the world."
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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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ABE
Association of Business Executives
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